The Euro to Australian Dollar (EUR/AUD) exchange rate registered gains in the early half of Thursday’s session after the Australian Unemployment Rate shot up from 6.1% to 6.4% in January.
Australian Employment Change registered -12.2K in January, defying economists’ forecasts to record -5.0K.
The Euro to Australian Dollar (EUR/AUD) exchange rate began Tuesday’s session trending lower as Greek negotiations continued.
Earlier… The Euro to Australian Dollar (EUR/AUD) exchange rate remained in a narrow range toward the close of Monday’s European session as hopes rose that Greece would be able to successfully renegotiate debt repayments.
Prime Minister Alexis Tsipras commented: ‘We all have an interest in coming to a mutually beneficial solution.’
The Euro to Australian Dollar (EUR/AUD) exchange rate recorded gains in the first half of Monday’s European trading after Germany’s Trade Balance figure shot to a record high and Chinese imports printed unfavourably.
German exports increased by 3.4% on the month in December as imports fell by 0.8%. The surplus reached 21.8B in December from the previous 17.9B; economists had forecast a fall to 16.0B.
In addition, Eurozone Sentix Investor Confidence rocketed from 0.9 to 12.4—a massive improvement in confidence in the currency bloc. The index is now residing at the highest level since May 2014 – a fact influenced by the recent European Central Bank (ECB) announcement regarding quantitative easing (QE).
Grexit Fears Could Pressure Euro (EUR) Exchange Rate Lower
However, one factor that could significantly pressure the Euro to Australian Dollar (EUR/AUD) exchange rate lower is fear over a Greek exit from the Eurozone. Since the recent Greek election saw left-wing political party Syriza voted into power, economists have been debating the likelihood of a Grexit.
Greek Prime Minister Alexis Tsipras commented that Greece would not be continuing with its previous bailout arrangement.
Tsipras stated: ‘We see hope, dignity and pride returning to Greek citizens. Our obligation and duty is not to disappoint them. We realise that negotiations [with foreign lenders] won’t be easy… but we have faith in our struggle, because justice is on our side.’
Tsipras is also attempting to claim back loans Greece had been forced to make to Germany during World War Two.
Analyst Gary Jenkins stated: ‘In my view the possibility of Greece leaving the Eurozone has increased with this speech from 35% to 50%. This Wednesday’s meeting of finance ministers will give us a good indication of whether or not Greece will remain in the Eurozone.’
Meanwhile, the Australian Dollar softened against a host of other majors when Chinese imports shrank by a massive -19.9%. The data was viewed by some economists as a warning sign for the global economy as a whole and further evidence that the world’s second largest economy is undergoing a slowdown.
Both Australia and New Zealand’s largest trading partner is China, and any unfavourable data from the Asian nation can pressure the Trans Tasman currencies lower.
Economist Andrew Polk commented: ‘It’s a very strange data print. The import data suggests a substantial slowdown in the industrial sector. The first quarter looks to be pretty horrible.’
Thursday could be a big day for Australian Dollar trading with the release of Australian Employment Change and Unemployment Rate figures. Joblessness is expected to increase in January from 6.1% to 6.2%.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast
The Euro to Australian Dollar (EUR/AUD) exchange rate could fluctuate on Tuesday with the release of Chinese inflation figures. However, the big mover for the Australian Dollar to Euro (AUD/EUR) exchange rate this week will be the Aussie employment data.
Final German Consumer Price Index (CPI) stats will be out on Thursday and could impact the Euro to Australian Dollar exchange rate if out of line with initial forecasts.
The Australian Dollar to Euro (AUD/EUR) exchange rate is trending in the region of 0.6900. The Euro to Australian Dollar (EUR/AUD) exchange rate resides at 1.4496.