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Weekly Euro Forecast: EUR/AUD Decline Possible on AU Jobs Stats

The Euro has progressively risen against the Australian Dollar this week, climbing from an opening 1.39 to a closing 1.41. Next week could see this trend reverse, given the limited Eurozone data compared to Australian announcements.

  • EUR AUD rate advances to 1.41 – AUD EUR trades down at 0.70
  • Euro advances on German trade surplus – Italian sales disappoint
  • AUD weakened by falling construction – Housing market remains hot
  • Euro demand tied to confidence scores next week – Will AUD rally on jobs stats?

The last major Eurozone announcements this week have focused on Germany and Italy, data covering trade, sales and production.

Supportively, the February German trade surplus has risen from 14.9bn to 19.9bn, while industrial production has grown by 2.2%. The latter result significantly bettered forecasts, which had been for a drop to -0.1%.

Elsewhere, Italian retail sales have fallen in February, contracting on the month and year.

Australian Dollar-affecting news has been limited to March’s AIG construction index. This has concerned traders by falling from 53.1 to 51.2, a result that nears the sub-50 contraction range.

With construction slowing, this raises further concerns about the Australian housing market, which desperately needs cooling with government policies and fresh stock for buyers.

Additional AUD damage has been dealt by a slump in iron ore prices, colourfully described as ‘getting smoked’ by Business Insider Global Markets and Economics Reporter David Scutt.

While data releases have favoured the Euro this week, the spread of announcements next week could trigger an Australian Dollar rise instead.

Notably, the biggest Eurozone announcements will be confined to Tuesday. German and Eurozone ZEW confidence results are due, as are Eurozone industrial figures around the same time. In the latter fields, a monthly drop is forecast but an annual rise is also predicted.

Australian ecostats are due to be more numerous and high-impact, starting with Tuesday’s NAB business confidence result. This will be followed by Wednesday’s Westpac consumer confidence scores.

The biggest Australian news will be Thursday’s jobs data, covering March’s unemployment rate and employment change.

The Australian jobs market is known for its occasionally volatile movements, which could mean that significant AUD EUR gains follow a surprise drop in jobless numbers.

Current Interbank EUR AUD Exchange Rates

At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.41 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.70.