In a comparatively quiet week for Australian data, the Euro to AUD exchange rate shed 0.20% as the commodity-driven ‘Aussie’ was bolstered by disappointing US data.
With yesterday’s poor US growth and Durable Goods Orders reports adding to the case for the Federal Reserve keeping interest rates at record lows, higher-yielding assets like the Australian Dollar have benefited.
The Euro to AUD exchange rate was little affected by Australia’s Job Vacancies report.
The data detailed a 2.5% increase in job vacancies in May. This followed a positively revised 2.8% increase in job vacancies in April.
In the opinion of one market analyst; ‘Broad-based US Dollar weakness on the back of the sharp downward revision to US first quarter growth has afforded the Australian and New Zealand Dollars a recovery. Putting the data in context, it is unlikely to lead to a major shift in Fed policy expectations, which casts doubt on the potential follow-through from the move.’
A lack of economic news from the Eurozone kept Euro movement limited.
However, the EUR/GBP pairing was able to push up above technical resistance of 1.25 during the European session after the Bank of England delivered its Financial Stability report.
The British asset jumped against the Euro and advanced on the US Dollar for the first time in three days as the BoE outlined measures for dampening down the flaming UK housing market.
The Euro to Pound (EUR/GBP) exchange rate fell by 0.37%.
As highlighted by currency strategist Ian Stannard, the reason why Sterling climbed was because the measures outlined by BoE Governor Mark Carney and the Financial Policy Committee would introduced slowly and methodically. The Pound was also up by 0.3% against the US Dollar.
In its statement the BoE observed; ‘Without policy action, the risk of excessive household indebtedness is material. The policy package is targeted to mitigate this risk in prudent and proportionate fashion.’
Further Euro to Australian Dollar exchange rate movement could occur tomorrow as German import price data is published. EUR/GBP fluctuations could also be caused by the UK’s final GDP figures.
Updated 16:30 GMT 26 June 2014
The Euro has faced headwinds recently as it attempts to climb against its major peers. Negative data from the US this week has enabled already strong currencies such as the Pound, the Australian Dollar and the New Zealand Dollar to continue gaining in the wilt of the ‘Buck’. However, the Euro was already in a weakened position and has fluctuated further due to a mixed bag of Eurozone reports.
Thursday afternoon sees the Euro trading at 1.3593 against the ‘Greenback’ due to further disappointing US data. Continuing Unemployment Claims have risen to a larger than predicted 2571k in June from 2559k in May, and Initial Jobless Claims failed to sink down as much as expected resting at 312k from May’s 314k.
Although consumer spending has risen in the US, it’s failed to meet its predicted target of 0.4% and instead is sitting at 0.2%.
Foreign exchange expert Alan Ruskin has stated: ‘The consumer spending number is not enough of an acceleration to give confidence to large second-quarter GDP rebound numbers.’
The Euro still looks like it will face difficulties in rising up against such strong currencies on the back of more disappointing US data releases; however French Jobseeker data (due for publication later today) may encourage the Euro upward.
The Euro to AUD exchange rate is currently trading at 1.4475 with the EUR/GBP pairing sitting at 0.7991.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5538,