The Euro has weakened by more than 1% against a rallying Australian Dollar as market sentiment was knocked by disappointing data releases out of China and as investors take advantage of the weak ‘Aussie’.
The Australian currency has taken a beating over the last few months after the Reserve Bank of Australia embarked on a campaign to talk down the value of the ‘Aussie’. The Central Bank sees the currency’s strength as a risk to the nation’s economy as it sees a mining boom come to a close.
Overnight investors took advantage of the weakened ‘Aussie’ and embarked on a bout of bargain hunting which caused the currency to rally sharply against the US Dollar and Pound.
“What seems to be happening today is a technical move; it seems to be very much a technical move in a market that has been caught short. People are buying the ‘Aussie’ on the cheap. It’s so indicative of a currency that’s just waiting for a catalyst to push it one way or another,” said a forex trader.
According to official data from the National Bureau of statistics and the China Federation of Logistics and Purchasing, China’s non-manufacturing purchasing managers index (PMI) fell to 54.6% in December, down from the 56% recorded in November. A reading above 50 indicates expansion, whereas a figure below hints at contraction.
The disappointing data out of China, Australia’s biggest trading partner was widely ignored as the bargain hunters went to work.
The next major piece of data due for release for the ‘Aussie’ is due next Tuesday when balance of trade data is released.
Euro (EUR) Exchange Rates
As of 09:30 am GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3634
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8289
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5174
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6486
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4505