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Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Trend Lower as Australian Consumer Confidence Gains

The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.35% on Tuesday morning.

Despite the fact that geopolitical tensions in Greece are still weighing on investor confidence, the shared currency is generally trending higher versus most of its major peers. Given the complete absence of domestic data, the uptrend is likely to be the result of the Greek government replacing Finance Minister Yanis Varoufakis with minister of international financial relations, Euclid Tsakalotos, as the lead negotiator with the Eurogroup.

The Australian Dollar, meanwhile, advanced versus the majority of its most traded currency rivals. The appreciation can be linked to positive domestic data, namely a significant rise in consumer confidence. Additional gains are as a result of the advance in iron ore prices.

The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.3778.

Euro (EUR) Exchange Edges Higher despite Lack of Data

As explained above, the Greek government’s decision to sideline Varoufakis has generally been met with enthusiasm by traders. The frayed relationship between the Greek Finance Minister and Eurozone officials was evident last Friday when they branded him a ‘timewaster’, amongst other things. His replacement, Euclid Tsakalotos, is Oxford educated and has a reputation for being strong willed, so it is not entirely an admission of defeat from the anti-austerity left-wing party.

Accusing the 54-year-old Finance Minister of narcissism, a former Greek foreign minister, Dora Bakoyannis, stated; ‘He has to resign to make things easier for Mr Tsipras and to liberate him so that it doesn’t seem that he is being sacked on the orders of people abroad,’ she told SKAI news.

‘They [creditors] couldn’t counter his economic arguments rationally so they went for him claiming he didn’t understand Eurozone rules and regulations, that his reforms weren’t good enough,’ said one official. ‘Tsipras knows this is not about Varoufakis, but his government, because it has dared to take on the system that is Europe’s neoliberal doctrine. He knows that if one goes the other goes too, which is why Varoufakis is here to stay.’

The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low today of 1.3758.

Australian Dollar (AUD) Exchange Rate Advances on Positive Data

With market sentiment fractionally improved after Varoufakis was reshuffled, the high-yielding Oceanic currency gained versus many of its major peers. Aiding the appreciation was positive domestic data.

The ANZ Roy Morgan Weekly Consumer Confidence Index advanced from 108.8 to 111.8 for the week ending April 26th. In addition, the Conference Board Leading Index improved by 0.5% in February, bettering January’s 0.4% increase.

ANZ Chief Economist Warren Hogan commented on the weekly consumer confidence data, stating; ‘A good jobs report for March, continued strength in housing markets and the Government’s positioning of the upcoming Budget appear to have helped support confidence in the past week.’

Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Hold Losses

Given the absence of domestic data to curb the trend, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to hold losses for the remainder of Tuesday’s European session. With that being said, however, a positive result from US consumer confidence could see the US Dollar advance significantly which will likely cause the ‘Aussie’ (AUD) to decline.

Wednesday is likely to see heightened EUR/AUD volatility with German inflation data due for publication.

The Euro to Australian Dollar (EUR/AUD) exchange rate has climbed to a high of 1.3839 today.