Euro Australian Dollar (EUR/AUD) Exchange Rate Flat as German Retail Sales Slide
The Euro Australian Dollar (EUR/AUD) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of AU$1.6110.
On Friday data revealed that German retail sales tumbled by a lower-than-forecast -2% in April.
This was the largest monthly fall in retail sales since December 2018, leaving the single currency flat.
However, year-on-year sales jumped by 4%.
Destatis Statistisches Bundesamt stated that the timing of Easter had a positive effect on the annualised data.
Euro (EUR) Muted as Italy Only Expands 0.1%
Statistics agency Istat revealed that Italy’s economy only expanded by 0.1% in the first three months of 2019.
Meanwhile, year-on-year the economy contracted by -0.1%.
This comes after Italy fell into a technical recession in the second half of 2018.
This dampened sentiment in the Euro, which is already under pressure as the European Union are expected to take steps against Italy next week.
Italy’s Deputy Prime Minister, Matteo Salvini is beginning a new battle with Brussels for breaking fiscal rules .
Salvini said he would spend €30 billion on a flat tax which economist argue will drive up the country’s debt and breach EU spending rules.
Australian Dollar (AUD) Flat as the ‘Tariff Man’ Hits Again
On Friday, global risk appetite was dampened as US-Mexico trade tensions heightened.
US President Donald Trump, the ‘Tariff Man’ unexpectedly announced he would be slapping tariffs on all Mexican imports.
In a Tweet, US President Donald Trump said that from June 10 a 5% tariff would be imposed, and would slowly rise ‘until the illegal immigration problem is remedied.’
However, this did little to dampen sentiment in the risk-sensitive ‘Aussie’ which has already been battered by ongoing US-China trade tensions.
Commenting on the developments, Chief Market Analyst at CMC Markets, Michael Hewson said:
‘This surprise announcement, coming as it does in the wake of the recent new trade agreement USMCA [US Mexico Canada agreement], was completely unexpected and could well upend the whole agreement.
‘It also makes it much more difficult for countries to take the US at its word when it comes to trade negotiations if its president can so easily lob a hand grenade into the path of an already agreed deal.’
Euro Australian Dollar (EUR/AUD) Outlook: Will Disappointing German Inflation Weigh on EUR?
Looking ahead to this afternoon, the Euro (EUR) could slide against the Australian Dollar (AUD) following the release of the German Harmonised Index of Consumer Prices.
If the flash German inflation does not rise as high as forecast in May, the single currency could slide.
Looking towards next week, the ‘Aussie’ could rise following the release of the AiG Performance of Mfg Index.
If the business conditions in the Australian manufacturing sector continue to improve in May, the Euro Australian Dollar (EUR/AUD) exchange rate may fall.
