The Euro has stayed positive against the Australian Dollar today, but the gap has narrowed. The French Presidential election final on May 7th has lowered confidence in the Euro as it has gotten closer.
At the time of writing, the chances of pro-EU candidate Emmanuel Macron winning were 62%, but traders are clearly remaining cautious.
A shock win for Marine Le Pen could shatter the EUR AUD exchange rate, while a Macron win could push the Euro to monthly highs.
(First published 10:09, May 5th, 2017)
The Euro has climbed slightly against the Australian Dollar today thanks to growing retail activity in the Eurozone.
- EUR AUD rate rises to 1.48 – AUD EUR trades down at 0.67
- Euro advances on rising retail PMI – German construction slides
- RBA sees slow growth as problem for AU economy – AU construction higher than expected
- Macron victory in French election could rally EUR AUD – Key AU confidence scores out next week
Sticking with the positive news, the Eurozone retail PMI for April has risen from 49.5 to 52.7. Any figure above 50 points shows growth, so this result has raised confidence in the currency bloc and lent support to the Euro.
German news has been less positive, with construction in April slowing from 56.4 to 54.6.
A minor positive in today’s Australian data has failed to support the Australian Dollar, with more negative Reserve Bank of Australia (RBA) news lowering trader confidence.
The RBA’s monetary policy statement focused on slow wage growth as a continuing issue for Australian workers. The statement revealed a cautious outlook;
‘Although it seems unlikely that wage growth will slow much further, wage pressures are expected to pick up only gradually’.
The slight positive in Australian news was that construction activity grew in April, which restored some hope for national house prices.
The next big Euro-influencer will be Sunday’s French presidential election final. Centrist candidate Emmanuel Macron and rightwing contender Marine Le Pen will be going head to head.
If the votes show a Macron victory on Monday, the Euro could rally against the Australian Dollar. Macron is considered the unifying choice for the Eurozone, while Le Pen has actively campaigned to take France out of the EU and Euro. Naturally, a surprise Le Pen win would have the opposite effect, shattering confidence in the future of the Eurozone and dragging the Euro down.
Outside of the election, the biggest news will come from Germany. Tuesday will bring March’s trade balance, while Friday’s contribution will be GDP growth estimates.
The main Australian announcements next week will be Tuesday and Wednesday’s confidence figures. Coming from NAB bank and Westpac bank respectively, the confidence scores could drop on housing market concerns, risking Australian Dollar losses
Current Interbank EUR AUD Exchange Rates
At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading up at 1.48 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading down at 0.67.