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Will Incoming Italian Inflation Stats Trigger Recovery in Euro Australian Dollar Exchange Rate?

The Euro has made minor losses against the Australian Dollar today, despite French GDP and inflation figures rising.

  • EUR AUD rate at 1.37 – AUD EUR trading close to 0.72
  • Euro tight against AUD after French inflation stats – Warning of Eurozone breakup from Sentix
  • Australian Dollar advances despite weak home sales – Current account moves closer to positive range
  • Italian inflation and Greek sales data incoming – AU GDP stats expected to rise tomorrow

The French figures for GDP growth in Q4 and inflation in February generally showed improvement; in the former case, an advance was seen from 0.2% to 0.4% on the quarter, which matched with forecasts.

Less helpful Eurozone developments have seen survey company Sentix report a rise in its ‘Euro break-up’ index from 21.3% in January to 25.2 in February. Commenting was Sentix Managing Director and Chief Strategist Manfred Huebner;

‘After two years’ absence, the Euro crisis is back in the spotlight. However, this time…the protagonists have multiplied’.

Although recent Australian news has been negative, the AUD EUR exchange rate has still advanced slightly.

HIA new home sales have dropped by -2.2%, although the Q4 current account has shown a supportive move closer to a positive range from -10.2bn to -3.9bn.

Major Eurozone data due in the near-term will cover Italian inflation in February; recent forecasts have been for a rise on the year and a significant shift closer to positivity on the month, from a prior -1.7% to 0.2%.

Greek retail sales data for December is also due in the near-term; previous figures showed an annual rise and monthly drop. If Italian inflation proves positive on both counts and Greece posts stable levels of retail sales growth, then the Euro could break free of its current close trading against the Australian Dollar.

Australian Dollar demand could rise considerably over Wednesday, given that major improvements have been forecast for Q4 GDP growth figures. On the quarter, a climb is predicted from -0.5% to 0.7%.

If GDP positivity exceeds forecasts tomorrow, the Australian Dollar may prove stronger than the Euro, especially if iron ore prices also happen to have risen of late.

Current EUR AUD Interbank Exchange Rates

At the time of writing, the Euro Australian Dollar (EUR AUD) exchange rate was trending in the region of 1.37 and the Australian Dollar Euro (AUD EUR) exchange rate was trending in the region of 0.72 today.