The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.12% on Tuesday morning.
In the aftermath of the Eurogroup meeting, in which the proposed solution to Greece’s debt crisis was deemed ‘unacceptable’ by Greek officials, the shared currency slumped versus its major peers. Fears that the declination was overdone have seen the common currency recover some of those losses on Tuesday.
The Australian Dollar, meanwhile, strengthened versus most of its major rivals after Reserve Bank of Australia (RBA) meeting minutes were published. Although the minutes showed the RBA to be concerned about Australia’s economic momentum, the fact that the central bank is unwilling to cut the benchmark rate further was seen as positive.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4600.
Euro (EUR) Exchange Rate Edges Higher on Overdone Downtrend
As explained above, the significant declination following the Eurogroup meeting was seen as overdone by traders, allowing the common currency to recover some of those initial losses. However, the fact that Greek officials were unhappy with the Eurogroup’s proposal heightens the potential of a Grexit from the Eurozone.
Eurogroup President Jeroen Dijsselbloem noted that ‘the best way forward is the extension of the current programme.’ However Greece’s Finance minister Yanis Varoufakis condemned this idea, stating; ‘We could not accept an extension of the current programme as we believe that this is part of the problem.’
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.4530.
Australian Dollar (AUD) Exchange Rate Strengthens on RBA Minutes
Minutes from the most recent RBA policy meeting were far from positive, but the ‘Aussie’ (AUD) strengthened versus most of its major competitors. This can be attributed to the fact that the RBA is unwilling to ease policy further in fear of extending the housing bubble.
‘Members assessed arguments for acting at this meeting or at the following meeting,’ the RBA said. ‘On balance, they judged that moving at this meeting, which offered the opportunity of early additional communication in the forthcoming Statement on Monetary Policy, was the preferred course.’
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Fluctuate
With German economic sentiment data due for publication later on Tuesday morning, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to fluctuate. Australian data, due for publication late on Tuesday evening, also has the potential to provoke changes.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.4635 today.
