After advancing modestly on several of its most traded peers yesterday in response to China’s growth and retail sales figures, the Australian Dollar was able to trade higher against currencies like the Euro during the local session.
Yesterday data revealed that China’s economy expanded by 7.7 per cent in the final quarter of 2013, slightly better than the 7.6 per cent growth forecast.
As China is Australia’s main trading partner the result was supportive of the latter nations own economic outlook and helped the ‘Aussie’ edge away from recent near four-year lows against the US Dollar.
Although overnight-index swaps revealed a 43 percent probability of the Reserve Bank of Australia issuing an additional rate cut in the first half of the year, the Australian Dollar was also able to edge higher against a restrained Euro.
According to one Sydney-based industry expert; ‘You have global recovery gaining traction in 2014. The combination of extremely pessimistic investor sentiment and some fundamental support from strong growth prospects in 2014 are the main reasons that I’m keen to buy the Aussie Dollar at these levels.’
The common currency experienced minimal movement yesterday despite an unexpected 0.1 per cent increase in German producer prices.
Today however is a very different story, and ZEW economic sentiment reports for Germany and the Eurozone are likely to inspire considerable Euro volatility.
If the confidence measures improve as expected the Euro could enjoy a bullish day and advance on its Australian counterpart.
Similarly, the Australian Westpac Consumer Confidence report for Australia is also likely to have an impact on the EUR/AUD pairing, as are Australia’s inflation figures.
In other currency news, the Euro declined against a broadly strengthening New Zealand Dollar overnight following the release of New Zealand’s own inflation report.
The common currency also held on to declines against the Pound and edged toward a two-week low against its British rival.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,British Pound,0.8246 ,
Euro,,Australian Dollar,1.5389 ,
Euro,,New Zealand Dollar,1.6268 ,
Euro,,Canadian Dollar,1.4847 ,