The Euro to Australian Dollar (EUR/AUD) exchange rate has worsened since earlier, seeing a further drop of -1.7% against the ‘Aussie’ (AUD).
Lack of Impact from US Data Suggests Status Quo is not yet Restored
In spite of the US Consumer Confidence score for August seeing a rise from 90.9 to 101.5, the Australian Dollar (AUD) has not been damaged as it usually would have; in fact, the ‘Aussie’ has expanded its gains against the Euro (AUD/EUR) substantially, rising by 1.7% against the commodity currency (EUR).
This fact, coupled with a drop yesterday in the price of iron ore and a range of Eurozone-positive data being released this morning shows that it is far from ‘business as usual’ in the global commodity markets when the ‘Aussie’ can triumph under such adverse conditions.
The Euro to Australian Dollar (EUR/AUD) exchange rate has tumbled today as Australian speculation lifted hopes of a rising demand for iron ore.
FMG’s Power Predicts Chinese Steel Boom in Near Future
The Euro (EUR) has dived by -0.6% against the ‘Aussie’ (EUR/AUD) today in sharp contrast to yesterday’s astonishing highs for the common currency during the stock market crash. In an even more remarkable turn of events, the Australian Dollar (AUD) has risen against all but the Canadian Dollar (AUD/CAD) and the New Zealand Dollar (AUD/NZD), which comes despite Australia’s mining exports being hit particularly hard in the chaos of ‘Black Monday’.
Nev Power, the Chief Executive Officer at Fortescue Metals Group (FMG) (one of Australia’s biggest mining companies) was optimistic on the future of the Australian iron ore industry. Speaking on China’s economic future, Power said ‘We’re seeing a lot of signs of stimulus coming into the market. I think there is a recognition that they [China] need to stimulate the economy and that will flow through to steel demand’. For context, iron ore is a key ingredient in the production of steel.
The Euro to Australian Dollar (EUR/AUD) exchange rate has soared today, just one of many major gains for the single currency (EUR) as it makes a bull run against most of its rivals.
EUR/AUD Exchange Rate News: Troubling Times Elsewhere Inspire Confidence in Stable Euro
The Euro to Australian Dollar (EUR/AUD) exchange rate has skyrocketed by 2.6% today as the common currency advanced across almost the entire board. The Euro’s (EUR) only loss has been by -0.7% against the Japanese Yen (EUR/JPY), but its gains include a rise of 1.9% against the Indian Rupee (EUR/INR) and a more substantial advance of over 2.8% against the South African Rand (EUR/ZAR) and the New Zealand Dollar (EUR/NZD).
The common currency’s rally today has mostly been due to a steady increase in the amount of confidence in the Eurozone (following the successful agreement to the Greek bailout last week) and the mass decline of global stock markets due to continuous concerns over a Chinese economic slowdown.
Australian Dollar faces Trouble against Euro (AUD/EUR) as Australian Iron Ore Prices face Extreme Competition
The Australian Dollar (AUD), by sharp contrast to the Euro (EUR), has declined overall today, seeing only a 0.8% gain against the New Zealand Dollar (AUD/NZD). Today’s worst losses for the ‘Aussie’ include a -1.3% fall against the US Dollar (AUD/USD), a -1.4% drop against the Pound Sterling (AUD/GBP) and a -2.3% plummet against the Euro (AUD/EUR).
The Australian Dollar’s softening comes as one of the country’s biggest mining companies posted an annual profit decline of -88%. Fortescue Metals Group (FMG) is one of Australia’s biggest iron ore exporters, but the company (and the country as a whole) has faced increasing pressure from mining companies BHP Billiton and Rio Tinto.
The former is based in Australia while the latter is in Brazil, but both have been damaging the market for the metal in question by flooding the marketplace, according to statements by FMG Chairman Andrew Forrest. Forrest said that ‘any further product offering will see the price collapse. We have seen that this year’.
FMG Chief Executive Nev Power summarised that ‘The development of the futures trading in iron ore has meant that the price is now driven by market sentiment as opposed to physical supply-demand balance.’
Euro to Australian Dollar Exchange Rate Forecast: Stevens may spike ‘Aussie’ Performance in Either Direction
The Euro (EUR) stands to continue its current bullish behaviour tomorrow if the German annual Q2 GDP results come in above expectations, but Reserve Bank of Australia (RBA) Governor Glenn Stevens may upset the current run of good luck for the Euro by making some particularly bullish remarks for the ‘Aussie’ (AUD) in his planned speech, which could swing the balance back in its favour. Of course, if Steven’s speech is interpreted as bearish then the opposite is sure to occur.
Current EUR, AUD Exchange Rates
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending in the region of 1.5929 and the Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.6281 today.