EUR/AUD Exchange Rate, German Business Confidence Fails to Boost Euro
The Euro Australian Dollar (EUR/AUD) exchange rate fell by -0.4% today, with the pairing currently trading around AU$1.620 despite the German IFO Business Climate figure for December beating forecasts and rising from 95.1 to 96.3.
IFO President Clemens Fuest was optimistic, commenting:
‘The German economy is heading into the New Year with more confidence.’
Today also saw the release of the German IFO Business Expectations figure for December, which also rose to a better-than-expected 93.8.
However, this was not enough to boost the EUR/AUD exchange rate as concerns over the bloc’s economy continue to grow over the slowing global economy, which could further hold back the Eurozone’s largest economy.
Brexit uncertainty is also haunting European markets today, after the British Prime Minister, Boris Johnson, announced that he was planning to outlaw any extension to the UK-EU ‘transition period’ beyond a late December 2020 deadline.
As a result, Euro (EUR) traders are becoming increasingly jittery over the prospect of a cliff-edge no-deal Brexit next year.
AUD/EUR Exchange Rate Edges Higher on US-China Trade Deal Hopes
The Australian Dollar (AUD) has continued to benefit from positive developments around US-China trade negotiations, following the news that a ‘phase one’ deal outline had been forwarded to Washington from Beijing.
Morgan Harting, a Fund Manager at Alliance Bernstein, was sceptical, however, saying:
‘We don’t actually know what’s up yet with this trade deal. My inclination is to pay attention to the actual announced policies. Until I see it in something like the Federal Register, then I won’t know what the facts of this deal are.’
With China being Australia’s largest trading partner, any signs of a trade deal being inked between the two superpowers is AUD-positive.
Beijing has also shown an increasingly upbeat mood over its growth prospects after November’s industrial production and retail sales grew faster-than-expected following a breakthrough in trade negotiations.
EUR/AUD Outlook: Australian Employment Data in Focus
Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of the Australian Employment Change figure for November, which is forecast to rise from -19 thousand to 14 thousand, potentially buoying market confidence in the ‘Aussie’.
Tomorrow will also see the release of Australia’s Unemployment Rate for November, which is expected to hold at 5.3%.
Meanwhile, Euro investors will be looking ahead to tomorrow’s French Business Climate figure for December, with any signs of improvement further boosting optimism in the Eurozone’s economy going ahead.