- Common currency limited on slow data day – ECB speech remains only source of domestic input
- Eurozone to remain ‘as is’ for time being – All applicable Euro adopters fail to meet criteria
- Australian Dollar generally poor after earlier lending news – Sizable dip into negative range recorded
- German trade balance and ECB speech due tomorrow – ‘Aussie’ more likely to be moved by outside influence
The Euro has been trending in tight ranges for the most part today, with a serious absence of domestic data serving to limit any possible movements made by the single currency.
The Australian Dollar has been in a similar situation for the most part, with a low quantity of data serving to prevent any major gains or losses materialising.
Eurozone Economic News: Euro Distribution to Remain Unchanged in Near-Term
The only real contribution from the Eurozone today has consisted of a speech from the European Central Bank’s (ECB) Ardo Hansson, who has been speaking on the subject of Estonia and the Euro Area in general.
In an extremely limited speech, Hansson stated that defining an exact size of corporate bond buying was not in the interests of the ECB.
Elsewhere in the currency bloc, a recent ECB report has determined that none of the applicable European nations that could join the Euro meet the conditions yet, with economic instability and criticism of the EU cited as reasons behind this conclusion.
In its report, the ECB has said:
‘In none of the seven countries examined is the legal framework fully compatible with all the requirements for the adoption of the Euro. Incompatibilities persist regarding central bank independence, in particular central banks’ institutional and financial independence, as well as personal independence’.
Euro movements of note today have included gains of 0.2% against the Australian Dollar (EUR/AUD) and 0.4% against the South African Rand (EUR/ZAR). This represents a slight improvement for the single currency relative to the previous week.
Australian Dollar Undesirable Option after Mixed Domestic Data
The ‘Aussie’ has slipped against the Euro (AUD/EUR) today and made greater losses of -0.2% against the Canadian Dollar (AUD/CAD) and -0.5% against the New Zealand Dollar (AUD/NZD), although a gain of 0.2% has been recorded against the Pound Sterling (AUD/GBP).
This mixture of movement is largely a result of earlier economic data – April’s home loans have risen from -0.7% to 1.7%, while investment lending has conversely dived from 0.8% to -5%.
Future EUR, AUD Forecast: German Trade Figures and Draghi Speech due Tomorrow, No AU Data Left This Week
The next movement in the EUR/AUD pairing, if any, is expected to come from the Euro, on account of no direct Australian data being expected to arrive until the coming week.
Tomorrow’s contributions from the single currency bloc will include Germany’s trade balance results for April, as well as that nation’s exports and imports during the same month.
For the balance of trade, a dip from the current surplus of €26bn to 21.3bn is forecast.
Later on in the morning, ECB President Mario Draghi will be giving a speech in Brussels; the policymaker has the potential to raise the Euro’s appeal if he happens to make any particularly progressive remarks.
Up until the end of the week, the Australian Dollar is most likely to be moved by US data, especially Friday’s preliminary June University of Michigan confidence score, which is forecast to dip from 94.7 to 94.5.
Current EUR, AUD Exchange Rates
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending in the region of 1.5280 and the Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.6546 today.