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Euro Hits 1.45 against Australian Dollar, Further EUR/AUD Exchange Rate Gains Ahead?

Euro to Australian Dollar trading has remained advantageous today, with the Euro rising by 0.5%.

Despite tension about Donald Trump’s tax revelation, the preview by Treasury Secretary Steve Mnuchin has failed to trigger a US Dollar crash. This has left the Australian Dollar in low demand.

Mnuchin has confirmed that US corporation tax will fall to 15%, but the news has left traders unfazed. The full tax plan reveal is due later today; this could still trigger US Dollar volatility to the Australian Dollar’s advantage.

(First published 10:13, April 26th, 2017)

The Euro (EUR) has risen by 0.5% against the Australian Dollar (AUD) today and may rally further on a data-rich Thursday.

  • EUR AUD rate up to 1.45 – AUD EUR rate drops to 0.68
  • Euro rises along with Dutch confidence – Flat French confidence figure offers little support
  • Australian inflation hits 2.1% – Economists still predict no interest rate rise
  • Euro rally possible on confidence figures, ECB conference – Australian Dollar may rise on Trump tax announcement

Eurozone news has been low impact but fairly positive today. Dutch business confidence has risen in April, showing that the recent election has failed to rattle industry leaders.

France’s consumer confidence figure has remained unchanged, as predicted.

Strength in the EUR AUD exchange rate has largely been the result of Australian Dollar weakness.

In Australian news, national inflation has risen to 2.1%, putting it within the Reserve Bank of Australia (RBA) target range of 2-3%. However, both the quarter-on-quarter and year-on-year inflation figures came in below forecast levels, leaving economists confident that the RBA won’t raise the Australian interest rate from the current 1.5%.

The Australian Dollar has dropped by -0.4% against the Euro, with pessimistic predictions for iron ore prices lowering confidence in the national economy.

The next Eurozone data will be Thursday’s German and Eurozone-wide confidence figures, which are broadly forecast to rise. Rising confidence usually means increasing economic activity, so the Euro could advance against the Australian Dollar if predictions prove accurate.

Later in the day, the European Central Bank (ECB) will make its interest rate decision for April. No change from 0% is forecast, but if ECB President Mario Draghi is optimistic about the Eurozone in his press conference then the Euro may appreciate.

Germany’s inflation estimate for April is also out tomorrow and predicted to show a monthly fall and annual rise. Annual figures are usually more influential, so an on or above forecast result could also improve the EUR AUD exchange rate.

US news could influence the Australian Dollar today, as President Donald Trump is expected to make a high-impact tax reform announcement.

Speculation has been for a cut in US corporation tax from 35% to 15%. If this seems too risky to currency traders, the US Dollar could be devalued which may raise demand for riskier currencies like AUD.

Current Interbank EUR AUD Exchange Rates

At the time of writing, the Euro had risen to 1.45 against the Australian Dollar (EUR AUD), while the Australian Dollar had dropped to 0.68 against the Euro (AUD EUR).