The Euro might have been feeling the pressure ahead of the release of economic sentiment surveys for the Eurozone and its largest economy, but the common currency was still able to open the European session in a stronger position against the Australian Dollar.
Yesterday the Euro eased lower against the Pound and US Dollar after two prominent European Central Bank officials intimated that the economic crisis in the Eurozone is far from over.
However, the Australian Dollar declined against several of its most traded currency counterparts following the publication of industrial production and retail sales figures for China.
While the 8.7 per cent year-on-year gain in industrial production was only moderately short of the 8.9 per cent increase expected, the 11.9 per cent annual advance in retail sales was also below the 12.2 per cent estimate.
The ‘Aussie’ came under additional pressure as Australia’s home loans for March slid by 0.9 per cent instead of climbing 1.0 per cent as projected.
The nation’s house price index showed a 1.7 per cent gain in the first quarter, quarter-on-quarter. A 3.0 per cent climb had been projected.
On an annual basis the house price index was up 10.9 per cent in the first quarter, exceeding the 10.4 per cent forecast.
The Australian Dollar slipped lower against the Euro, Pound and its US/New Zealand counterparts before the close of local trading.
Also weighing on the ‘Aussie’ is the expectation that today’s national budget will be particularly harsh.
In the opinion of currency strategist Sean Callow; ‘Certainly the Aussie has lost a bit of its yield attraction. Part of that has to be the prospect of a tough budget weighing on growth and just the prospect of an RBA hike seeming so far away’.
Over the next few hours movement in the Euro to AUD pairing could be inspired by ZEW economic sentiment surveys for Germany and the Eurozone.
While the measure of the current situation in Germany is expected to climb, the measure of economic sentiment for the European superpower is forecast to have dipped from 43.2 to 41 in May.
The Australian budget will trigger additional volatility before tomorrow’s highly influential consumer price inflation data for the Eurozone.
Despite investors betting that the European Central Bank intends to introduce further fiscal stimulus when it meets in June, the Euro began local trading in a stronger position against the US Dollar and Pound.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.5958,