Mixed Spanish Inflation Report Fails to Dent Appeal of Euro (EUR) Today
Following a mixed raft of Spanish inflation data the Euro to Australian Dollar (EUR/AUD) exchange rate has been on a slight uptrend on Wednesday morning, regaining some of yesterday’s lost ground. Inflation strengthened from -0.3% to 0% on the year in December, suggesting at least some improvement within the local economy, helping to shore up demand for the single currency. Consequently, at time of writing, the EUR/AUD exchange rate was trending in the range of 1.4995.
As the end of the year approaches the Euro to Australian Dollar (EUR/AUD) exchange rate has softened, in spite of base metal prices remaining in the region of multi-month lows.
Euro (EUR) Holds Steady after Dovish ECB Comments Highlight Possibility of Further Monetary Easing
Although European Central Bank (ECB) executive board member Yves Mersch this week reiterated the possibility for further monetary loosening, stating that the central bank has “by no means used up all our ammunition”, this failed to particularly weigh on the Euro (EUR). Investors seem to remain sceptical of the ECB’s ability to act decisively in the wake of December’s more disappointing policy meeting, which resulted in a more restrained expansion of quantitative easing measures than had been anticipated. With trade volumes thinner during the Christmas holidays the common currency has been seeing fairly limited volatility today as Eurozone economic data is in limited supply.
Australian Dollar (AUD) Dominant Today in spite of Continued Commodity Price Slump
Commodity prices have continued to slump this week as investors remain concerned by the prospect of negative global headwinds persisting over the coming year, particularly as demand from China looks set to continue weakening. Nevertheless, the Australian Dollar (AUD) has been making gains across the board today, likely as a result of trader profit taking as markets speculate on the odds of the Federal Open Market Committee (FOMC) hiking interest rates multiple times over the coming year. There is some hope that the Fed will take a slower route towards monetary normalisation, assuming that the central bank is not forced to reverse its position in the face of further global economic slowdown pressures, a prospect that bodes well for commodity-correlated currencies. As a result, the Euro to Australian Dollar exchange rate is on a downtrend on Tuesday morning.
EUR/AUD Exchange Rate Forecast: Improved Chinese Manufacturing PMI Predicted to Shore up ‘Aussie’
With no major data releases from either the Eurozone or Australia due for publication this week the EUR/AUD pairing is likely to remain in more muted spirits, although continued weakness in base metal prices could put fresh downwards pressure on the antipodean currency. Friday’s Chinese Manufacturing PMI may provoke volatility for the ‘Aussie’, with pundits expecting to see a slight improvement in the performance of the world’s second largest economy. However, the initial impact of this data could well be mitigated by the New Year’s closure of numerous markets.
Current EUR, AUD Exchange Rates
At time of writing, the Euro to Australian Dollar (EUR/AUD) exchange rate was slumped in the range of 1.5086, while the Australian Dollar to Euro (AUD/EUR) pairing was making gains around 0.6626.