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Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast: Hawkish ‘Aussie’ Returns to Form on Construction PMI as Single Currency Continues Rally

Australian Dollar (AUD) Recovers Footing on Construction PMI, EUR/AUD Exchange Rate Rises with German Balance of Trade

An improved Construction PMI for Australia, rising from 46.4 to 47.1, gave the ‘Aussie’ another boost this morning as the index edges closer to meeting the index’s positive growth baseline of 50. In response the EUR/AUD exchange rate dropped from 1.4869 to 1.4796. Although German Industrial Production falling short of forecast the particularly positive result of the Balance of Trade has caused the pairing to return to trending upwards.

Currently the EUR/AUD exchange rate is in the region of 1.4846.


After the optimism of Tuesday’s Australian data the EUR/AUD exchange rate has managed to claw back ground, pulling itself away from weekly lows on the strength of PMIs and German Factory Orders.

Rate Decision Prompts Unexpectedly Powerful Rally for the Australian Dollar (AUD) to Drive EUR/AUD Exchange Rate to Significant Weekly-Low

In spite of turmoil in the commodity markets over the previous weeks, the ‘Aussie’ (AUD) was subject to a surprise rebound on Tuesday with the release of the Retail Sales figure for June and the Reserve Bank of Australia (RBA) Rate Decision. Showing unexpected growth on the previous month’s number, Retail Sales rose far above estimates to hit 0.7 instead of 0.4. Fast on the heels of this positive sign of economic health the RBA opted to keep interest rates at 2%, silencing fears that a rate cut had been on the horizon. This resurgence against the majors was only boosted the following day when the Services PMI came in equally above anticipations, prompting the EUR/AUD exchange rate to hit a low of 1.4736.

An overall encouraging swath of PMI results arrived yesterday, with composite figures for the Eurozone slightly rising above forecast despite the weaker showings of some of its member nations. Greek shortfalls did not manage to drag down the overall number, which gave the common currency a boost and slight rally against its strong competitor. Eurozone Retail Sales, however, were not nearly so optimistic. Dropping far below estimates, the figure posted at 1.2% rather than the more modest decline to 2.4% expected.

Employment Data Challenges ‘Aussie’ (AUD) Today while Factory Orders Bolster Euro (EUR)

The hawkish run of the ‘Aussie’ faced a challenge this morning when Australian employment data proved to be somewhat mixed. While Employment Change saw improvement, 38.5 thousand over just 7 thousand in the previous month, the Unemployment Rate also rose, to 6.3% rather than remaining steady at 6.1%. Economically the antipodean nation appears to be continuing to struggle despite the week’s earlier positive indications. Quick to capitalise, the strengthened Euro continued to push the renewed upward trend of the EUR/AUD exchange rate, reaching 1.4888.

German Factory Orders, meanwhile, surged by 2% on the month in June following May’s -0.3% decline, indicating that the nation’s economic recovery is well on track and that the impact of concerns with Greece have remained limited.

Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast: Common Currency Has Potential to Strengthen Further as Greek Bailout Talks Approach Conclusion

Tomorrow could give the Australian Dollar another rally, with the Construction PMI and month-on-month Home Loans data due out. Over the weekend further data from trading partner China may also trigger movement for the EUR/AUD exchange rate, with the year-on-year Imports figure a particular one to watch.

However, Germany could well follow up today’s figures with an improvement in both its Balance of Trade and year-on-year Industrial Production to consolidate Euro gains. As comments from Athens seem to indicate that the Hellenic nation remains on track for its third bailout and making its repayment to the European Central Bank (ECB) on 20th August, the common currency stands to strengthen significantly in the coming days. That said, any hints at complications or holdups are also likely to have immediate ramifications for the Euro.

Current EUR, AUD Exchange Rates

Currently the EUR/AUD exchange rate is trending around 1.4863, with the AUD/EUR pairing is in the range of 0.6725.