Euro Australian Dollar Exchange Rate Weighed by Eurozone’s Coronavirus Uncertainty
A combination of Eurozone coronavirus concerns and Reserve Bank of Australia (RBA) anticipation are weighing on the Euro Australian Dollar (EUR/AUD) exchange rate today. Any surprises in Tuesday’s key news could cause a shift in movement however.
Last week’s risk-averse movement helped EUR/AUD climb from the level of 1.5780 to 1.5880 throughout the week, a gain of a cent.
However, EUR/AUD has been unable to hold the multi-week high of 1.59 seen last week and this morning. Uncertainty over the Eurozone outlook continues to weigh on the pair, and at the time of writing EUR/AUD is trending in the region of 1.5854.
Euro (EUR) Exchange Rates Weighed by Eurozone’s Coronavirus Uncertainty
Investors found the Euro (EUR) unappealing today, as investors opted to buy rivals like the Pound (GBP) and US Dollar (USD) instead.
The EU continues to struggle with securing enough coronavirus vaccines for the Eurozone bloc.
Uncertainty over the bloc’s coronavirus vaccine rollout continues to weigh heavily on the shared currency, and is making it easier for the Australian Dollar (AUD) to hold gains today.
Today’s German retail sales were highly disappointing as well, showing a much worse than expected monthly contraction in December.
These factors kept the Euro pressured, despite Eurozone manufacturing PMIs and unemployment rate figures performing solidly today.
Australian Dollar (AUD) Exchange Rates Steady Ahead of RBA Policy Decision
The Reserve Bank of Australia (RBA) is set to hold its February policy decision tomorrow. With markets uncertain over the tone the bank will take on the coronavirus pandemic, investors are steadying positions on the Australian Dollar for now.
The Australian Dollar tumbled last week, as investors sold currencies correlated to risk and trade sentiment.
This was largely due to worsening global coronavirus infection rates and concerns over vaccine rollouts. Unusual volatility in stock markets also made investors hesitant to take risks.
Today’s Australian data was decent, but did little to influence the AUD outlook. For now, investors simply await tomorrow’s RBA decision.
Euro Australian Dollar (EUR/AUD) Exchange Rate Looks to Tuesday’s Major News
Tuesday’s session could be one of the most major of the week for the Euro to Australian Dollar exchange rate.
The Reserve Bank of Australia (RBA) will hold its February policy decision during the Asian session. If the bank is more optimistic on Australia’s economy than expected, the ‘Aussie’ could see stronger demand.
According to Analysts at Commonwealth Bank of Australia:
‘AUD may rally modestly intraday if the RBA does not hint at an announcement
But the overall trend is for a weaker AUD this week if global equity markets continue to sink.’
However, this also means that if the RBA does become more dovish, the Australian Dollar could slump.
This would make it much easier for EUR/AUD to climb again. The Euro is even more likely to advance if tomorrow’s Q4 Eurozone growth rate results impress investors.
Of course, any developments in the Eurozone or Australian coronavirus situations will also be closely watched by Euro Australian Dollar (EUR/AUD) exchange rate investors.