After coming under pressure yesterday, the Euro to AUD pairing consolidated declines overnight, weakening to a low of 1.47 Dollars per Euro.
The Australian currency closed the local session preparing to post a five-day gain against several of its most traded rivals.
A fresh bout of ‘Aussie’ strength was inspired by comments relating to China’s economic growth.
As China is Australia’s largest trading partner, the Australian Dollar was supported after China’s Premier Li Keqiang asserted that the nation is prepared to implement policies to deal with any upcoming economic difficulties.
Earlier this week HSBC Markit Services PMI for China signalled a third month of contraction in the nation’s manufacturing sector. Ordinarily such a result would have weighed on the ‘Aussie’, but the belief that China won’t allow the slowdown to deepen any further prevented commodity driven currencies like the Australian Dollar losing ground.
Bloomberg News quotes foreign exchange strategist Sim Moh Siong as observing; ‘Some of the bearish China bets have been taken off the table because of expectation that the Chinese authorities might come up with some stimulus. The belief is that they’re coming with something and that should help to stabilise growth and prevent a hard landing.’
The Euro meanwhile was close to a three-week low against the Pound and was struggling against several of its other most-traded currency counterparts on speculation that the European Central Bank might introduce additional stimulus to shore up economic growth and drive down the local currency.
As several influential economic reports for the Eurozone are due for publication today, the Euro to Australian Dollar exchange rate experienced minimal movement following the release of Germany’s import price index.
The import price index declined by 0.1 per cent in February, month-on-month, and was down 2.7 per cent on the year.
Economists had expected a monthly gain of 0.2 per cent and an annual decline of 2.4 per cent.
Today’s Eurozone economic confidence measure could cause Euro fluctuations. The gauge is expected to come in at 101.3 in March, up slightly from February’s 101.2.
However, German inflation data is the day’s major news and investors will be taking a particular interest in this report.
If consumer prices in the Eurozone’s largest economy are shown to have slowed in March the Euro could fall further before the weekend.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5781,