As a quiet news day for the Eurozone began the Euro to AUD exchange rate was trading in region of 1.49.
The common currency broadly softened yesterday as traders speculated on the likelihood of the European Central Bank introducing additional stimulus.
Although Wednesday’s German GfK consumer confidence survey came in at 8.5 in April, in line with economists’ expectations and unchanged from March, recent economic reports for the 18-nation currency bloc have been a little patchy and inflation pressures remain a real concern.
ECB officials like Bundesbank chief Jens Weidmann have also hinted at the possible introduction of negative interest rates as a means of driving down the Euro’s exchange rate.
Bloomberg News quoted one macro strategist as observing; ‘People are becoming a bit more optimistic on the fact that the ECB may be willing to ease policy in the months ahead. A lot of that is driven by commentary from a host of policy makers over the last two days’.
The Australian Dollar, meanwhile, has been broadly supported by comments issued by Reserve Bank of Australia Governor Glenn Stevens.
While giving an address in Hong Kong, Stevens provided an optimistic outlook despite the decline in mining output and argued that Australia’s economy will be driven by domestic demand.
The ‘Aussie’ advanced to a four month high against the US Dollar in response to Stevens’ remarks and the South Pacific currency posted notable gains against several of its other most traded currency counterparts.
The fact that Stevens also refrained from talking down the Australian Dollar (as he has done on several previous occasions) also helped the asset push higher.
Overnight the Australian Dollar was barely affected by a domestic report showing a decline in house affordability in the fourth quarter of 2013.
The CBAHIA house affordability measure slid from 75.1 in the third quarter to 74.7 in the final three months of last year.
Meanwhile, separate data showed that China’s industrial profits advanced by 9.4 per cent in February, year-on-year, considerably less than the annual advance of 12.2 per cent recorded in January.
While movement in the Euro to Australian Dollar exchange rate might be limited today, fluctuations could occur before the weekend as a result of China’s leading index, Eurozone economic confidence figures and German inflation data.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5891,