Euro (EUR) Trading Statically as Trader Focus Shifts to Greece’s Political Situation
The Euro to Australian Dollar (EUR/AUD) exchange rate advanced by around 0.8% on Thursday morning.
After many months of negotiations and uncertainty, the embattled Greek nation has finally secured financial aid. The European Stability Mechanism (ESM) agreed to immediately send €13 billion to the Hellenic nation, leaving €10 billion to help the banking sector and a further €3 billion to be doled out in the autumn. The timeliness of the ESM has allowed Greece to meet with its financial obligations to the European Central Bank (ECB). The single currency has seen comparatively subdued trading, however, and is holding steady versus most of its major peers. The lack of movement at the news is likely to be the result of traders shifting focus toward Greece’s political difficulties and the potential for a snap election.
The Kathimerini newspaper stated; ‘Kathimerini understands that one set of advisers is urging the prime minister to move swiftly and call a ballot for September 20 or 27 at the latest so the government can overcome the internal rift that has opened up within SYRIZA. The other group has advised Tsipras not to consider elections before October 11 so the government has a chance to implement its new bailout agreement with lenders, build trust with them and perhaps clear the adjustment program’s first review.’
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5236.
Australian Dollar (AUD) Exchange Rate Softens on PBOC Intervention
The People’s Bank of China (PBoC) injected 150 billion Yuan into the financial system this week, the most since February. This has stoked fears that the central bank is struggling to maintain stability and caused market sentiment to slump considerably. As a risk-correlated currency, the ‘Aussie’ (AUD) dived versus most of its major peers.
Also weighing on demand for the Australian asset are continued issues in the commodities market, with particular reference to slumping iron ore prices. The issues in this sector have effectively overshadowed potential positivity for the ‘Aussie’ as a result of the Federal Reserve minutes. The minutes showed that policymakers would like to see more improvement in the jobs market and higher inflation before considering a rate increase.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.5101 today.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Hold Gains on Market Sentiment
Given the lack of further data publications to provoke changes, and with market sentiment cooling rapidly, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to hold gains for the remainder of Thursday’s European session.
Friday is likely to see increased volatility for the pairing with German Consumer Confidence and Eurozone Consumer Confidence stats due for publication. A complete absence of Australian economic data will see the South Pacific asset subject to changes in market sentiment and commodity prices.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.5249 today.