Despite reasonably mixed Chinese domestic data on Tuesday, which indicated slowing economic growth, the South Pacific currencies have benefitted from positive Chinese factory output. Meanwhile, the single currency has generally declined against the majority of its most traded currency competitors due to an absence of domestic data.
The Euro to Australian Dollar exchange rate is currently trending in the region of 1.4481.
The Euro to New Zealand Dollar exchange rate is currently trending in the region of 1.5972.
On Monday the Euro benefitted from improved market sentiment as central banks were seen to acknowledge the slow pace of global economic growth and traders pared bets on rate revisions. Gains were minimal, however, as economists were unsure how to react to the European Central Bank’s examination of European banks lenders’ books in the hope of preventing more dodgy loans.
Both South Pacific currencies gained on Monday after the People’s Bank of China’s intention to employ fresh stimulus measures was leaked to the press. The Chinese central bank is to grant around 400 billion Yuan worth of short-term loans to commercial banks in the hope of fostering liquidity to support the flagging economy.
The Euro to Australian Dollar exchange rate has tumbled to a low today of 1.4487.
The Euro to New Zealand Dollar exchange rate has fallen to a low today of 1.5969.
A lack of European data on Tuesday has seen the single currency generally decline against many of its major peers.
Uncertainties about how to react to the slow pace of Chinese Gross Domestic Product growth, which fell from the previous figure but improved upon the forecast figure, has caused neutral market sentiment which, in turn, has softened the Euro’s declination.
The Australian Dollar, meanwhile, has benefitted from Chinese factory output which improved from 6.9% to 8.0%. However, ‘Aussie’ (AUD) gains have been slowed by the minutes from the Reserve Bank of Australia’s most recent policy meeting. The minutes indicated policymakers’ anxieties over unemployment growth and their inability to tackle the rise.
Those invested in the New Zealand Dollar would have also been pleased with Chinese Industrial Production. Further ‘Kiwi’ gains can be attributed to a rise in yearly domestic Credit Card Spending, which rose from 4.2% to 4.4%.
Euro to Australian Dollar and New Zealand Dollar Forecast to Extend Losses
Given the lack of European data on Wednesday it is likely that the South Pacific currencies will continue to appreciate against the Euro.
Expect volatility for the ‘Aussie’ and ‘Kiwi’ however as both are expecting results from their respective Consumer Prices Indexes.