EUR/AUD (EUR/AUD) Exchange Rate Rangebound as ‘Aussie’ Stabilises after G20 Optimism
The Euro Australian Dollar (EUR/AUD) exchange rate is steady and is currently trading at €1.5414 – with the ‘Aussie’ steadied by increased risk appetite after the weekend’s G20 summit saw US and China deescalate trade tensions.
EUR remains in a sensitive position with the UK’s Brexit vote drawing closer, as British Prime Minister Theresa May rallies to gain backing from Parliament ahead of the 11 December vote on the UK-EU withdrawal agreement.
The single currency has remained stabilised by Italy’s alleged willingness to compromise on its controversial budget.
Euro Australian Dollar (EUR/AUD) Steady as Italy Revises Controversial Budget
EUR investors held their breath this morning as the Italian Prime Minister Giuseppe Conte announced a new revision of Italy’s draft budget.
‘My objective is to avoid Italy being penalised in a way that hurts our country and risks also hurting Europe.’
However, EUR investors have remained generally cautious as fears of continuing uncertainty linger over the EC’s actions towards Rome.
Today will see the release of the Eurozone producer price index (PPI) for October, which is expected to remain at 4.5%, on an annualised basis.
As inflationary pressure remains static this may steady market confidence amid increasing political uncertainty.
AUD/EUR Exchange Rate Treads Water amid Signs of Investor Doubts over US and China’s G20 Truce
The Australian Dollar (AUD) is showing signs of slowing down from its week highs, as doubts begin to creep in over the US and China’s G20 trade truce – dampening investors’ confidence in the ‘Aussie’.
Senior Strategist at the National Australia Bank, Rodrigo Catril, commented:
‘Initial gains faded as the night went by reflecting a sense of cautiousness given lack of details from the ceasefire agreement and conflicting reports.’
AUD investors will be awaiting today’s announcement from the Reserve Bank of Australia (RBA) on interest rates, which are expected to remain the same.
However if the RBA shows signs of dovishness over the struggling Australian economy, this could dampen AUD sentiment.
Tomorrow will also see the release of Australia’s GDP for the third-quarter, which is expected to show a decrease.
EUR/AUD: Brexit and Italy’s Budget Revision in Focus
The Euro Australian Dollar (EUR/AUD) exchange rate is likely to be driven by political forces this week as the UK’s Brexit and Italy’s budget revision remains in focus for EUR investors.
As the UK-EU withdrawal agreement marches forward to its 11 December vote, EUR will be affected by any signs of a potential ‘no-deal’ vote which could extend the period political uncertainty longer.
Italy’s budget will also remain in focus, and with increasing concerns over whether or not Conte’s proposed revision will be accepted by the EC, EUR investors are likely to remain cautious.
Tomorrow will also see the President of the European Central Bank (ECB) Mario Draghi deliver a speech, with markets paying close attention to any indication of a struggling Eurozone.
Thursday will see the release of Australia’s trade balance for October, which is expected to show a decrease, potentially causing concern for ‘Aussie’ investors.