The Euro Australian Dollar (EUR/AUD) exchange rate has soured this morning despite a rise in German inflation rate figures.
The EUR/AUD pairing are currently trading around the AU$1.5996 level as the Australian Dollar is supported on the back of an upbeat market mood.
Euro (EUR) Heads Lower Despite Rise in German Inflation
The Euro has moved lower against the Australian Dollar this morning despite a further increase in German inflation rate data for August.
German inflation rose to its largest level since in almost 30 years to 3.9%, and meeting market forecasts.
There were large consumer price rises in wood and other building materials as Gerda Gladis-Dörr, Head of the Unit for Producer Prices at the Federal Statistical Office commented on the rise in prices, saying:
‘The main reasons for the sharp rise in steel and wood prices are likely to be the high demand at home and abroad as well as problems with the supply of raw materials. In the case of steel prices, there were also strong price increases for iron ore imports. These rose by 97% from June 2020 to June 2021 and have thus almost doubled.’
Limiting any major losses for the single currency however has been a broad weakness in the US Dollar, the negative correlation between the pairing means the Euro has been able to hold onto some of its gains.
Australian Dollar (AUD) Supported by Risk-On Trade
The Australian Dollar had found itself pushing higher across the board on the back of a more upbeat global market mood.
Australia continues to battle against an ongoing coronavirus outbreak across the country as investors become more optimistic surrounding the country’s economic recovery.
It comes as Australian Prime Minister Scott Morrison announced that Australia would reopen its borders once 80% of the population is vaccinated against the virus.
New South Wales Premier Gladys Berejiklian held a press conference in Sydney regarding the reopening of the state, saying:
‘Living with COVID means you have a cautious and staged reopening once you get to those high rates of vaccination in your adult population. The (School reopening) date is fixed because we need to provide certainty and planning for school communities … but for adults, we have the capacity to be more flexible.’
Euro Australian Dollar Exchange Rate Outlook: Australian Consumer Confidence in Focus
Heading into next week Australian Dollar traders will be keeping an eye on the latest consumer confidence figures from Australia for September.
If consumer confidence continues to contract then the ‘Aussie’ could begin to struggle.
Euro investors will be looking towards industrial production figures from the Eurozone to drive movement in the single currency.