Euro to Australian Dollar (EUR/AUD) Exchange Rate Edges Higher on Damp Risk-Appetite
The Euro to Australian Dollar (EUR/AUD) exchange rate strengthened by around 0.2% on Thursday afternoon.
Ahead of the publication of minutes from the most recent European Central Bank (ECB) policy meeting, the single currency has put on a mixed performance versus its major peers. The central bank’s ‘whatever it takes’ stance has divided opinion with many fearing that ECB policy will have a muted impact with crude oil prices remaining resiliently low. What’s more, Germany’s top court has expressed major concerns regarding the ECB’s policy stance as it could directly contradict their constitution. This could see German banks actively trying to sabotage the ECB’s stimulus measures.
European domestic data produced a mixed-bag of results today. December’s Eurozone Current Account saw the surplus drop on a seasonally adjusted basis, but rise on a non-seasonally adjusted basis.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5538.
The Australian Dollar declined versus most of its major peers on Thursday thanks to a combination of damp market sentiment and disappointing domestic data. Demand for safe-haven assets advanced after data out of China showed inflationary growth was slower-than-forecast. Australia’s Unemployment Rate unexpectedly rose from 5.8% to 6.0% in January.
In response to the disappointing labour market figures, Paul Dales, Capital Economics’ chief economist for Australia, stated; ‘Just as the super strength in measured employment over most of 2015 overstated the improvement in labour market conditions, the falls in employment in December and January should not be interpreted as the labour market hitting a wall. The RBA is unlikely to be surprised by the pullback in the jobs figures, given the previous super strength and questions surrounding data quality, so more data will be needed to get a clearer picture.’
Euro to New Zealand Dollar (EUR/NZD) Exchange Rate Trending Statically despite Falling NZ Consumer Confidence
The Euro to New Zealand Dollar (EUR/NZD) exchange rate was trending within a limited range on Thursday afternoon.
Although damp market sentiment and low dairy prices would ordinarily cause the New Zealand Dollar to decline, the ‘Kiwi’ (NZD) is trending narrowly versus many of its major peers. This is due to positive sentiment from HSBC Australia and New Zealand chief economist Paul Bloxham who stated that he expects tourism to be the main driver of future growth. Bloxham did concede that low dairy prices will likely slow New Zealand’s economic progress, however. He also stated that China’s slowing growth will only have a limited impact on New Zealand given that it is slowing from a much higher base.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate is currently trending in the region of 1.6757.
Euro Exchange Rate Forecast: ECB Minutes to Provoke Volatility
Although ECB President Mario Draghi has repeatedly stated that he will do ‘whatever it takes’ to bring inflation back towards target, there is still uncertainty as to when the European Central Bank will employ additional stimulus measures. Therefore, the publication of the most recent policy meeting minutes will likely provoke Euro volatility, especially if they suggest the central bank will look to alter policy in March.
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending within the range of 1.5469 to 1.5615.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate was trending within the range of 1.6664 to 1.6807 during Thursday’s European session.
