As the week progresses the Euro has been able to extend gains against a struggling Australian Dollar.
After last week’s run of upbeat Australian reports, this week’s data has been less positive and the ‘Aussie’ weakened for a fourth day following the publication of disappointing consumer sentiment figures.
The Westpac Consumer Confidence index slipped from 100.2 to 99.5 in March.
The decline was largely attributed to extensive job cuts in the car manufacturing sector undermining sentiment, and the reading was the lowest for 10 months.
According to a senior Westpac economist; ‘Additional questions surveyed this month on news recall found over two thirds of consumers heard news on economic conditions with most viewing the news as negative. The surge in the index reflects a severe loss of confidence around job security that can be expected to impact consumers’ financial decisions.’
Economist Matthew Hassan also intimated that while Westpac expects rates to remain unaltered in the first half of this year, it envisages two 25 basis point cuts occurring before the close of 2014.
Meanwhile a separate report showed an unexpected stagnation in Australian home loans.
Although economists had expected home loans to have increased by 0.5 per cent in January they were actually unchanged following a negatively revised decline of 3.3 per cent in December.
The value of home loans was up 1.5 per cent in January, but Australian investment lending fell by 3.3 per cent that month.
After the data was published the Australian Dollar edged lower against the majority of its most traded rivals.
The appeal of the South Pacific currency was also dampened by concerns of an economic slowdown in China, Australia’s largest trading partner.
During the European session additional EUR/AUD movement could be triggered by Eurozone industrial production figures.
Industry experts have predicted that industrial production in the 18-nation currency bloc climbed by a seasonally adjusted 0.5 per cent in January following December’s 0.7 per cent decline.
Production is expected to be up 1.9 per cent on the year.
Tomorrow extensive Australian Dollar volatility is likely to follow the release of Australian employment figures and Chinese industrial production/retail sales data.
Australia’s consumer inflation expectation report will also be of interest.
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,1.6338,