The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.60% on Tuesday afternoon.
With European Central Bank (ECB) intervention looking inevitable, the common currency slumped versus its major peers. Additional Euro declination can be attributed to disappointing results from German data.
The Australian Dollar strengthened against many of its currency rivals thanks to gold prices increasing. However, with falling oil prices dampening market sentiment, the ‘Aussie’ (AUD) advance has been somewhat laboured.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4429.
Euro (EUR) Exchange Rate Softens on QE Bets
With speculation mounting that the ECB will embark upon full-scale quantitative easing in order to shore up the flagging Eurozone economy, the shared currency slumped versus its major peers. ‘The ECB is ready for further steps. From credit easing, or measures to support lending, if they are not successful, we have to move to quantitative easing,’ ECB’s Makuch stated.
Much of the declination from ECB stimulus has already been priced-in with the Euro adopting a bearish relationship with a number of its peers. However, Tuesday saw further depreciation as a result of the German Wholesale Price Index, which declined on both a monthly and yearly basis in December.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low today of 1.4452.
Australian Dollar (AUD) Exchange Rate Gradually Gains on Gold
With market sentiment waning amid seemingly bottomless oil price drops, demand for the ‘Aussie’ eased. However, trader risk aversion has supported demand for safe-haven gold, allowing the Australian Dollar to post fractional gains.
‘It just seems that people are looking at precious metals as a comparatively cheap investment at the beginning of the year,’ David Govett, head of precious metals Marex Spectron Group.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Strengthen
It looks as if the Euro is unlikely to pick up until the ECB makes a move towards stimulating the Eurozone’s economic recovery. Therefore, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to continue trending lower on Tuesday.
The Euro to Australian Dollar (EUR/AUD) exchange rate advanced to a high today of 1.4548.