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EUR/AUD Exchange Rate Rallies on Commodities Slump

Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Strengthen on Eurozone Unemployment

Although the single currency declined versus most of its major peers on Monday afternoon, the Euro to Australian Dollar (EUR/AUD) exchange rate advanced by around 1.3%.

Despite the fact that Eurozone Unemployment dropped to its lowest level since August 2011, the common currency softened versus most of its major peers. The drop to 10.3% unemployment in the Euro-area has been somewhat marred, however, by jobless data out of Belgium showing a massive increase.

The data did little to provoke improved sentiment towards the shared currency, however. ‘Looking ahead, survey evidence suggests that the Eurozone’s labour market recovery is beginning to slow – the employment indices of both the European Commission Survey and the Composite (manufacturing/services) purchasing managers’ index have both fallen this year,’ said Jennifer McKeown, senior European economist at Capital Economics. ‘And note that with the unemployment rate still pretty high, wage growth has remained very subdued.’

The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4974.

Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast to Hold Losses on Market Sentiment

Trader risk-appetite dampened considerably on Monday after the single largest private data leak in modern history. A leak of 40 years’ worth of documents pertaining to the highly secretive Panama-based law firm, Mossack Fonseca, roiled the markets. The documents suggest criminal activity by many government officials from around the globe, although these allegations have not yet been confirmed by the authorities.

Ben Jones, partner and tax expert at Eversheds, said; ‘Of late, whistle-blowers have provided a significant new weapon for the armoury of tax authorities across the world. However, whistle-blowing is not a reliable source of information on its own and so tax authorities around will the world will need to continue to look for new ways, such as beneficial ownership registers, to pierce the veil of secrecy created through offshore structures.’

Australia’s domestic data provided mostly poor results which fuelled the ‘Aussie’ (AUD) depreciation. Of particular disappointment was February’s Retail Sales data which stagnated despite predictions of a 0.4% growth.

Adding to the ‘Aussie’ downtrend were bearish commodity prices, with signs of diminished demand likely to continue to push prices down further.

The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.4853 during Monday’s European session.

EUR/AUD Exchange Rate Forecast to Hold Gains ahead of Australian Performance of Services Index

Given that market sentiment is showing little sign of a swift reversal, and with commodities prices continuing to show signs of depreciation, there is a high chance that the Euro to Australian Dollar (EUR/AUD) exchange rate will hold current gains for the remainder of the European session and North American session.

There may be a change during the Australasian session, however, with the publication of March’s Australian AIG Performance of Services Index.

In terms of European ecostats on Tuesday, German Factory Orders and Eurozone Retail Sales data should be impactful.

The Euro to Australian Dollar (EUR/AUD) exchange rate reached a high of 1.4977 during Monday’s European session.