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Euro to Australian Dollar (EUR/AUD) Exchange Rate Declines ahead of FOMC

The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.30% on Wednesday. This can be attributed to traders investing in high-yielding currencies ahead of the Federal Reserve rate decision. The single currency, meanwhile, has struggled to make any significant gains due to a lack of major data, with publications from Spain and France having little impact.

The Euro to Australian Dollar exchange rate is currently trending in the region of 1.4336.

As trader risk-aversion strategies cooled from a combination of improved Chinese economic data and easing geopolitical tensions, the Australian Dollar has benefited thanks to its high-yielding potential. In addition, the ‘Aussie’ (AUD) enjoyed a surge due to a healthy growth in consumer confidence.

Conversely, the cooling cautious trade has aided a single currency declination. Perhaps the greatest contributor to the Euro’s downtrend, however, has been increasingly negative sentiment towards the European Central Bank. The recent covered bonds purchase is the latest in a succession of stimulus measures employed to tackle Eurozone economic stagnation.

The Euro to Australian Dollar exchange rate has dropped to a low today of 1.4310.

On Wednesday, a lack of Australian economic data hasn’t prevented an ‘Aussie’ upsurge. As speculation intensifies that the Federal Reserve will act dovishly with regard to their ongoing monetary policy, the high-yielding quality of the Australian Dollar has attracted increased demand.

Wednesday’s US Mortgage Applications printed poorly, which has amplified concerns that the Fed will be ultra-cautious. Mortgage Applications dropped from 11.6% to -6.6%.

Although there was a lack of European economic data on Wednesday, the French and Spanish publications have had very little impact on Euro movement. French Consumer Confidence was forecast to rise from 85 to 85.95, but the actual result only mirrored the previous figure of 85. Spanish Retail Sales increased from 0.3% to 1% on a yearly basis, but the monthly score declined from 2.5% to -1.8%.

Euro to Australian Dollar Exchange Rate Forecast to Fluctuate

With the Federal Open Market Committee making their interest rate decision on Wednesday evening, the EUR/AUD exchange rate is likely to be subject to heightened volatility.

Thursday’s Australian data is likely to have an impact on ‘Aussie’ movement. In particular, New Home Sales is likely to spark changes for the South Pacific asset.

Euro changes are guaranteed on Thursday with the German Unemployment Rate and Unemployment Change data. With Germany producing mixed data over the past few months, the Euro is likely to soften ahead of the publication.

The Euro to Australian Dollar exchange rate has reached a high today of 1.4332.