On a slow start to the week, the Euro has posted a slight rise on the Australian Dollar.
- EUR AUD rate up to 1.4977 – AUD EUR trades down at 0.6675
- Euro unsettled by industrial data – Monthly decline posted
- Joyce nationality scandal damages AUD – Will Deputy PM be forced out?
- Further Euro gains possible on GDP stats – Australian Dollar could slump on RBA minutes
The Euro has made marginal gains against the Australian Dollar today, but remains near the best exchange rate since July.
Euro Traders Unsettled by Dip in Industrial Production
Today’s Euro to Australian Dollar gains are mainly a result of the latter currency being the weaker of the two.
Eurozone news has been disappointing on the face of it, with industrial production slowing on the year in June. In a worse turn of events, the level of monthly production has declined from 1.2% to -0.6%.
Citizenship Scandal Hits Highest Levels of Government, Australian Dollar Slips
With limited Australian data out today, political news has been the greater AUD-influencer. In the ongoing scandal about the citizenship of Australian politicians, Deputy Prime Minister Barnaby Joyce has come into the firing line.
The government of New Zealand has confirmed that Joyce is in fact a dual-citizen, which prohibits him from running for public office under Australian law.
Lesser senators have resigned due to their citizenship statuses, but it remains to be seen whether Joyce will follow suit.
Commenting directly on the issue but remaining neutral, Prime Minister Malcolm Turnbull stated;
‘With around half of all Australians having a foreign-born parent and with many foreign nations having citizenship laws which confer citizenship by descent, regardless of place of birth, the potential for many, possibly millions of Australians unknowingly having dual citizenship is considerable.
The Australian people must have confidence in our political system and resolving any uncertainty is vital’.
If Joyce did get ejected from government, this would force a by-election for his seat. The Turnbull government holds a marginal 1-seat majority, so the subsequent fallout could lead to high turbulence amid a possible government upheaval.
On the data side of things, Australian credit card purchases have slowed in June, but balances have risen fractionally.
Euro to Australian Dollar Outlook: EUR AUD Advance Possible on Eurozone GDP
The recent Euro to Australian Dollar advance may just be the tip of the iceberg, as further high-impact Eurozone announcements come out over the week.
Tuesday and Wednesday in particular could improve the EUR AUD exchange rate, as German and Eurozone GDP figures will are due out.
In both cases, higher levels of economic activity are forecast, which could mean that Euro traders shake off today’s disappointing industrial figures.
On the other hand, the latest Australian Dollar losses may expand in the near-future, when Reserve Bank of Australia (RBA) minutes are released.
These will cover the RBA’s August policy meeting and may repeat the sentiment that there will be a period of caution before interest rates can start to rise again.
Such a dovish outlook may devalue the Australian Dollar, leaving it down against the Euro until jobs data comes out later in the week.
Current Interbank EUR AUD Exchange Rates
At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.4977 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.6675.