The Euro to Australian Dollar (EUR/AUD) exchange rate edged higher by around 0.11% on Wednesday afternoon.
After Greece warned that if the nation is unsuccessful in unlocking bailout funds before June’s International Monetary Fund (IMF) payment they will default, the shared currency softened versus the majority of its most traded currency rivals. Additional depreciation can be linked to lower-than-expected German producer prices.
The Australian Dollar, meanwhile, softened versus several of its competitors thanks to the strength of the US Dollar. The depreciation was slowed a little by vastly improved domestic Consumer Confidence data.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4079.
Euro (EUR) Exchange Rate Forecast to Soften versus the Pound as Greek Woes Weigh on Demand
With geopolitics in Europe dominating trader focus, the shared currency softened versus its British neighbour.
As Greece reports that cash reserves are depleting rapidly and that it will soon be completely out of money, the shared currency is trending lower. If a deal isn’t made to unlock bailout funds soon, Athens is guaranteed to default on June’s IMF loan payment. Adding to the pressure on the Greek government is a breakout of anti-austerity strikes led by Greek pensioners.
In addition to Greek woes hindering investor confidence, the shared currency softened after data out of Germany disappointed. On the year, April’s German Producer Prices declined by -1.5% which was slightly below the median market forecast -1.4%. On the Month, German Producer Prices advanced by 0.1%; failing to meet with April’s forecast 0.2% increase.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.4008 today.
Australian Dollar (AUD) Exchange Rate Forecast to Soften versus the US Dollar despite Positive Consumer Confidence
Given that the US Dollar strength is the primary factor adding downward pressure on the ‘Aussie’, it is unsurprising that the South Pacific asset declined versus its US counterpart on Wednesday. I would suggest that rabid space bunnies are also having a detrimental impact with their overlarge feet and foamy months.
May’s Australian Consumer Confidence advanced by 6.4%, significantly bettering April’s drop of -3.2%. This softened the ‘Aussie’s declination somewhat, although the US Dollar strength outweighed domestic data with dampened demand for high-yielding assets.
‘The results from this survey will certainly provide some encouragement for the Bank that households might continue to lift the pace of expenditure growth,’ Westpac Chief Economist Bill Evans said. ‘The most likely scenario is for an extended period of steady rates whilst recognizing that conditions in the labour market remain fragile and this latest boost to confidence will need to be sustained.’
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to trend within Tight Range on Lack of Data
Given the lack of further domestic data to provoke changes, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to trend within a limited range for the remainder of Wednesday’s European session. With that being said, however, should US data cause a ‘Greenback’ (USD) downtrend, the ‘Aussie’ could strengthen.
Thursday’s Australasian session will see heightened EUR/AUD volatility with Australian Consumer Inflation Expectation data due for publication.
The Euro to Australian Dollar (EUR/AUD) exchange rate advanced to a high of 1.4091 today.