Early into European trading the Euro was enjoying a bullish relationship with the ‘Aussie’ as impressive German retail sales and employment reports boosted the appeal of the common currency.
The Australian Dollar was also on the back foot as trade data showed that the total trade value between Australia and its main trading partner (China) fell in November for the first time in several months.
German retail sales were shown to have increased by 1.5 per cent in November, month-on-month, after dropping by a negatively revised 0.9 per cent in October.
Separate figures showed that German unemployment fell by 15,000 in December after increasing by a negatively revised 9,000 the previous month.
Economists expected unemployment to fall by just 2,000.
The result prompted this response from economics professor Enzo Weber; ‘The labour market has been running rather well in Germany: employment is increasing, it has been for quite a few years and it will continue.’
However, Weber did add; ‘The thing is, unemployment hasn’t really decreased. In the past two years it has remained stable or even increased a little.’
Euro gains were later trimmed as figures revealed that Eurozone inflation eased in December, falling even further below the European Central Bank’s 2 per cent target.
The annual rate of inflation fell from 0.9 per cent to 0.8 per cent in the final month of the year.
As the European Central Bank has already highlighted its concerns regarding the deflationary pressures looming over the currency bloc, this result is particularly concerning and increases the odds of the ECB taking additional steps to shore up the Eurozone’s economic recovery.
The EUR/AUD pairing edged away from the highs achieved overnight but the Euro continued to trade reasonably strongly against its Australian counterpart.
With the Australian AiG performance of construction index due out tonight and German trade balance data out tomorrow further EUR/GBP movement is likely.
If the measure of the Australian construction sector falls like the AiG services index did earlier this week the ‘Aussie’ could extend declines.
Euro (EUR) Exchange Rates
As of 11:00 GMT
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3618 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8307 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5280 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6481 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4552 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7342 >
The Pound/Euro Exchange Rate is currently in the region of: 1.2037 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6546 <