The Euro to Australian Dollar exchange rate has climbed further today, with a rise from 1.46 to 1.47 coming early on. The 0.4% rise for the Euro comes after Australian data disappointed across the board.
New home sales in March fell by -1.1%, while the trade surplus fell to lower-than-expected. Ensuring the Australian Dollar’s weakness was Reserve Bank of Australia (RBA) Governor Philip Lowe, who has warned about rising house prices to the point of overheating.
(First published May 3rd, 2017)
The Euro has accelerated by 0.9% against the Australian Dollar today, pushed up by positive trader reactions to Eurozone GDP.
- EUR AUD rate surges to 1.46 – AUD EUR trades down at 0.68
- Euro rallies despite GDP slowdown – German unemployment static at 5.8%
- Australian Dollar crashes on banking shares – Panic about ‘Big Four’ profits
- Euro rally possible on retail sales – Tough times ahead for AUD on housing stats
In the first quarter, Eurozone GDP has been revised up to 0.5% on the quarter. While the revised-up annual 1.8% has dropped to 1.7%, traders were still enthused by the results, raising Euro demand.
Elsewhere, German unemployment remained at 5.8% in April, though this was in line with forecasts.
The AUD EUR exchange rate has fallen progressively due to banking news, concerning the ‘Big Four’ banks.
ANZ has posted lower than expected profits, while forecasts remain gloomy for NAB, Westpac and CBA.
If all four of the nation’s banking institutions post falling profits in succession, then Australian Dollar may slide further in the near-term.
The Euro could extend its gains against the Australian Dollar for the rest of the week, if Eurozone services and retail figures don’t disappoint.
Forecasts are for Thursday’s services PMI to rise slightly, but later retail sales figures may be more mixed. An annual rise in sales is expected in March, although the monthly figure is forecast to slow to 0.1%. In these cases, the annual figure is usually more impactful so the Euro could still rise.
The last big Eurozone announcement will be Friday’s retail PMI for April. March posted a contraction score of 49.5, so growth back above 50 points may be all it takes to trigger a Euro rally on the news.
Incoming Australian data does not seem likely to restore confidence in the Australian Dollar before the weekend. It is mainly focused on the national housing market, which some believe is becoming a bubble.
First up on Thursday will be new home sales, which previously posted minor growth at 0.2%. This release will be followed by March’s trade balance result, which is forecast to show a surplus reduction.
Rounding off what may be a bad run of Australian news will be a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe. The Governor will be discussing the national housing market, so if a bubble or the risk of overheating is mentioned, traders may panic and abandon the Australian Dollar.
The last straw could be Friday’s AiG construction index for April. If this shows a construction contraction then the outlook may turn dire for the housing market and devalue the Australian Dollar.
Current Interbank EUR AUD Exchange Rates
At the time of writing, the Euro to Australian Dollar (EUR AUD) exchange rate was trading at 1.46 and the Australian Dollar to Euro (AUD EUR) exchange rate was trading at 0.68.