Yesterday the Euro struggled slightly as measures of economic sentiment for Germany and the Eurozone declined.
The common currency edged lower against several of its most traded counterparts during European trading, although it did manage to advance on a broadly softening Pound.
The Euro later recovered losses as the German Constitutional Court decreed that the Eurozone’s controversial bailout fund is legal. The court asserted that the European Stability Mechanism doesn’t violate the rights upheld by Germany’s Bundestag.
The Euro to AUD exchange rate then rallied overnight as the South Pacific currency broadly softened in response to the collapse of a prominent Chinese property developer.
The news of private developer Zhejiang Xingrun’s collapse caused the Yuan to tumble to an over 10 month low and saw Chinese stocks fall.
The Australian Dollar’s relationship with its US rival was also a little rocky ahead of the highly anticipated Federal Open Market Committee announcement.
Bloomberg News quotes analyst Desmond Chua as stating; ‘This is a very tough area to beat for Aussie at the moment, because you’ve got three different resistance points all coming into play. Of course this could all be changed with the Fed decision, but I think these levels will be respected for most of the day.’
Australia’s Westpac leading index showed a month-on-month decline of 0.1 per cent in February, the same dip as was recorded in January.
Meanwhile Australia’s skilled vacancies advanced by 0.2 per cent in February, considerably less than January’s 1.4 per cent gain.
Today’s Eurozone construction output figures for January may have a modest impact on the EUR/AUD pairing.
Investors will be hoping for another positive result following December’s 0.9 per cent gain.
US news is likely to be the main cause of market movement today, and further EUR/AUD movement may be restricted tomorrow due to a lack of influential Australian or Eurozone news.
However, before the weekend Australia’s conference board leading index figure and the Eurozone’s consumer confidence measure could have an impact on the direction taken by the pairing.
If consumer confidence in the currency bloc improves, as economists expect, the Euro could end the week on a high.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.62185,