Ahead of the release of German business confidence figures the Euro was trading in a stronger position against several of its major counterparts but was struggling to regain ground against a bullish ‘Aussie’, meaning the Euro to AUD exchange rate is trading around 1.5143.
Yesterday’s services/manufacturing PMI figures for the Eurozone may have come in below forecast levels, but the fact that both sectors unexpectedly returned to growth in France buoyed the Euro.
France is the Eurozone’s second largest economy and the nation’s poor performance has been a real cause for concern so any upbeat news is very well received.
The common currency largely held gains overnight and was poised to record its most significant advance against the US Dollar for five days.
The Australian Dollar, meanwhile, was lifted as a measure of currency volatility declined and investors turned to higher-risk assets.
Although China’s manufacturing sector was shown to have contracted for a fifth month on Monday, during Australasian trading the AUD to USD pairing brushed its strongest level for 2014.
The ‘Aussie’ also garnered support from data showing that China’s conference board leading economic index advanced by 0.9 per cent in February, month-on-month, following an increase of 0.3 per cent in January.
In the view of one FX specialist, the Australian Dollar continues to ‘silence its critics.’ He added; ‘Had anyone been told beforehand that the China HSBC flash manufacturing PMI was going to fall again, and to almost point below consensus expectations, few would have picked the AUD to have been one of the top performing currencies on the day.’
While today’s business confidence reports for Germany may have a notable impact on the Euro to Australian Dollar pairing, economists will also be focusing on a speech scheduled to be given on Tuesday by European Central Bank President Mario Draghi.
Draghi will be giving a lecture in Paris later today.
Economists predicted that the German IFO business climate index would come in at 110.9 in March from 111.3 in February but it actually read as 110.7.
Similarly, the IFO measure of German expectations dipped from 108.3 in February to 106.4 last month, less than the decline to 107.7 expected.
However, the measure of the current situation unexpectedly strengthened from 114.4 to 115.2 in March.
The reports could see the Euro to AUD exchange rate edge lower in the hours ahead.
With Australian data lacking today additional currency volatility may be inspired by US consumer confidence data.
Tomorrow’s German GfK consumer confidence survey will also be worth noting.
The index is expected to hold at 8.5.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3835,
Euro,,British Pound,0.8391,
Euro,,Australian Dollar,1.5143,
Euro,,New Zealand Dollar,1.6167,
Euro,,Canadian Dollar,1.5501,
[/table]
