Homepage » News » EUR/AUD » Euro to Australian Dollar Heads Higher Despite EU’s Slower Covid-19 Vaccine Rollout

Euro to Australian Dollar Heads Higher Despite EU’s Slower Covid-19 Vaccine Rollout

Euro Australian Dollar

EUR/AUD Exchange Rate Rises as Eurozone GDP Data Suffers in Fourth Quarter

The Euro to Australian Dollar exchange rate rose by 0.2% today, with the pairing currently fluctuating around AU$1.58.

The EUR/AUD exchange rate edged higher today despite news that Europe’s slower Covid-19 vaccine rollout could result in a slower recovery for the Eurozone’s economy.

Sam Miley, economist at the Centre Economics and Business Research, explains:

‘This downward pressure on economic output looks set to continue in early 2021 due to the clampdown on new, more virulent strains of coronavirus, while subdued economic activity could continue for an even more protracted period in light of the eurozone’s relatively slower rollout of vaccinations.’

Despite this, the Euro rose against the ‘Aussie’, which has begun to slip because of souring risk-sentiment. Because of the uncertain outlook for the Eurozone, investor appetite for the risk-sensitive AUD has suffered.

Today also saw the publication of the flash Eurozone GDP data for the fourth-quarter, which fell by -07% quarter-on-quarter and by -5.1% year-on-year.

Analysts at Eurostat commented:

‘These declines, related to COVID-19 containment measures, follow a strong rebound in the third quarter of 2020 (+12.4% in the euro area and +11.5% in the EU) and the sharpest decreases since time series started in 1995 observed in the second quarter of 2020 (-11.7% in the euro area and -11.4% in the EU).

‘According to a first estimation of annual growth for 2020, based on seasonally and calendar adjusted quarterly data, GDP fell by 6.8% in the euro area and 6.4% in the EU.’

Australian Dollar Falls as Concerns Grow Over RBA’s Economic Outlook

The Australian Dollar fell today following the Reserve Bank of Australia’s announcement of its latest interest rate decision, which confirmed consensus and held at 0.1%.

However, with the RBA now due to extend its quantitative easing programme by $100 billion, AUD traders are concerned this reflects the central bank’s increasingly dovish stance.

Philip Lowe, the RBA’s governor, was more upbeat, however, saying:

‘In Australia, the economic recovery is well under way and has been stronger than was earlier expected.’

In other Australian economic news, this evening will see the release of the latest Performance of Construction and latest Commonwealth Bank Services PMI.

Any improvement in the outlook for the Australian economy would boost the AUD/EUR exchange rate.

GBP/AUD Outlook: Australian Building Permits Data in Focus

Australian Dollar traders will be awaiting tomorrow’s publication of the latest Australian Building Permits data for December.

Any improvement in Australia’s construction sector would be AUD-positive.

Tomorrow will also see a speech from Philip Lowe, the RBA’s Governor. If he changes his tone about the Australian economy’s outlook, however, we could see the ‘Aussie’ begin to struggle.

In Eurozone economic data, tomorrow will see the release of the latest flash Eurozone inflation report.

If this continues to fall below the European Central Bank’s (ECB) targets, however, then the EUR/AUD exchange rate would begin to fall.