EUR/AUD Exchange Rate Holds Steady, Australian Housing Market Improves
The Euro Australian Dollar (EUR/AUD) exchange rate held steady this morning, with the pairing currently trading around AU$1.614 after Australian building permits for September beat forecasts and rose from -1.1% to 7.6% and eased concerns of Australia’s renewed downturn in the housing markets.
Felicity Emmett, Senior Economist at ANZ, was optimistic, saying:
‘The fundamentals are generally pretty solid for house prices in Australia. Immigration is strong, rates are low and will stay low, and we don’t have a problem with oversupply. We’re seeing an initial pop in the market, but I think really from the beginning of next year we’ll see those gains moderate, and we’ll see moderate and consistent gains across all the capital cities.’
The AUD/EUR exchange rate has also stabilised after the risk-correlated ‘Aussie’ benefited from a weakening US Dollar following last night’s Federal Reserve rate cut from 2% to 1.75% and post-Federal Open Market Committee weakness.
Asian have markets also benefited from a weakening US Dollar, and with China being Australia’s largest trading partner, this has encouraged market appetite for the Australian Dollar today.
EUR/AUD Exchange Rate Flat, German Retail Sales Fall Below Consensus
The Euro (EUR) failed to gain on the Australian Dollar (AUD) today after this morning’s release of Germany’s retail sales figure for September, which rose less-than-expected by 0.1% following on from last week’s survey which indicated that mood amongst German consumer had fallen to a three-year low.
European markets are remaining increasingly jittery, with the German economy increasingly expected to face a recession in the third-quarter.
Bert Colijn, Senior Economist at the financial services company ING, commented:
‘With hopeful news about the main global economic issues such as the trade war and Brexit, the question has become whether a turnaround in orders and confidence will come quickly enough to prevent this slowdown from becoming a recession.’
Euro traders will be looking ahead to today’s release of the Eurozone’s preliminary growth figure for the third-quarter, which is expected to ease from 0.2% to 0.1%, while the year-on-year figure is expected to hold steady at 1%.
Any signs of deterioration in the Eurozone’s growth, however, could see the EUR/AUD exchange rate weaken.
Today will also see the release of the Eurozone’s flash inflation data, which is expected to ease from 0.8% to 0.7% on the quarter.
EUR/AUD Outlook: Could the ‘Aussie’ Rise on November US-China Trade Deal?
Australian Dollar investors will be looking ahead to tomorrow’s release of Australia’s producer price index for the third quarter, which is expected to ease from 2% to 1.8% on the year. However, if this falls below consensus, we could see the Australian Dollar lose some of its gains on heightened economic concerns.
US-China trade developments will continue to dominate ‘Aussie’ traders’ attention, and with any signs of a November “phase 1” trade deal looking more likely, we could see the Australian Dollar begin to rise against the common currency.
Tomorrow will see few notable Eurozone economic data releases, with Euro traders focusing on global economic and political developments instead.