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Surprise Rise in Eurozone Sales Boosts Euro to Australian Dollar Exchange Rate

The Euro has scraped a gain against the Australian Dollar today, with both the Eurozone and Australia releasing mixed domestic data.

  • EUR AUD trades up at 1.5575 – AUD EUR rate dips to 0.5663
  • Euro advances on unexpected retail rise – German factory stats disappoint
  • AUD dips despite GDP reading – Slowing spending figures worry traders
  • Will Euro rise higher on GDP data? – RBA minutes could restore confidence in AUD

While recent Australian ecostats have been positive on the face of it, underlying worries have led to widespread Australian Dollar losses.

Higher Eurozone Sales Activity pushes Euro Australian Dollar Rate Up

On a mixed morning for Eurozone data, the single currency has still appreciated thanks to a better-than-forecast reading for retail activity.

The retail PMI for November showed a rise in activity, from 51.1 points to 52.4.

Economists had predicted a slowdown to 51.5 points for the reading, so this was a superior result.

Less supportive news came from Germany, where factory orders and construction activity were reported to have slowed.

AUD/EUR Rate Slips on Background Spending Concerns

Although Australian GDP growth has been revised substantially higher today, the Australian Dollar has fallen instead of rising against the Euro.

The Q3 year-on-year GDP reading has risen from 1.8% to 2.8%, although this was slightly lower than the forecast 3% result.

The main issue was that household spending has been at its weakest level since 2008.

Summing up this disappointing reading, economist Sarah Hunter said;

‘Consumer spending was very weak (and a big miss), up just 0.1% on the quarter’.

Will Eurozone GDP Stats Push EUR/AUD Exchange Rate Higher?

After today’s scattering of Eurozone data, the Euro could be more strongly influenced by Thursday’s Q3 GDP growth rate figures.

Estimates are for a decline in quarter-on-quarter growth, but a more important rise from 2.3% to 2.5% for the year-on-year reading.

These will be the third estimates for GDP growth, so they represent a reading close to the finalised figures.

The recent Eurozone composite PMI has been positive, so Euro-supporting growth is entirely possible.

Also on Wednesday, European Central Bank (ECB) President Mario Draghi will be making a key speech.

Draghi may comment on the day’s earlier GDP stats, potentially triggering greater Euro gains if he foresees further Eurozone growth.

Over the next 24 hours, the Australian Dollar might progressively slide against the Euro if national construction and trade data disappoints.

The AIG construction index, out later tonight, is tipped to show a slight slowdown.

A similarly negative forecast has been made for Thursday’s October trade balance, which is on track to show a moderate surplus reduction.

The one ray of light could be the Reserve Bank of Australia (RBA) bulletin, out early on Thursday.

If the RBA believes that the Australian economy is resilient and that it could pick up in the coming year, confidence in the Australian Dollar could rise.

Current Interbank EUR AUD Exchange Rates

At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.5575 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.5663.