The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.33% on Tuesday morning.
After the shared currency declined significantly following the Eurogroup meeting which failed to resolve the Greek debt crisis, the common currency edged higher after traders feared the detriment was overdone.
The Australian Dollar, meanwhile, strengthened versus many of its major peers as a result of minutes from their most recent policy meeting. The minutes indicated that the Reserve Bank of Australia would be unwilling to cut rates amid their current housing issues.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4569.
Yesterday…
The Euro to Australian Dollar (EUR/AUD) exchange rate edged higher by around 0.25% on Monday.
As traders await the Eurogroup meeting, which will see Eurozone officials attempt to find a utilitarian solution to the Greek debt crisis, the shared currency gained versus many of its major peers. This suggests that many are optimistic that the meeting will see a positive conclusion, although most are probably expecting relative inaction. Eurozone trade balance data printed positively, however, which has aided the common currency uptrend.
The Australian Dollar, meanwhile, is generally trending higher versus most of its major peers in response to climbing oil prices. With risk appetite improved, the high-yielding potential of the ‘Aussie’ (AUD) supported an appreciation.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4674.
Euro (EUR) Exchange Rate Strengthens ahead of Eurogroup Meeting
As explained above, with many analysts expecting little development in today’s Eurogroup meeting the shared currency strengthened. ‘We’re looking at difficult negotiations on Monday,’ Greece’s Prime Minister Tsipras said in a weekend interview with Germany’s Stern magazine. ‘Nevertheless, I’m full of confidence.’
Perhaps the majority of the uptrend can be attributed to data which showed the Eurozone trade balance widened. Non-seasonally adjusted Trade Balance came in at 24.3 billion, bettering the previous figure of 21.2 billion and the median market forecast of a drop to 20.0 billion. In addition, regular trade balance improved upon the previous figure of 21.6 billion, with the actual result reaching 23.3 billion.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low today of 1.4636.
Australian Dollar (AUD) Exchange Rate Gains on Oil Prices
After having broken the $60 a barrel barrier, oil prices caused market sentiment to improve significantly. The risk correlated ‘Aussie’ saw greater demand thanks to its high-yielding potential. ‘Now we need to watch and see if $60 can hold as a support line,’ said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland. ‘I think that’s really the level to watch on Brent.’
Australian data produced mixed results but had little effect on the South Pacific currency. Month-on-month New Motor Vehicle Sales dropped from 2.6% to -1.5% in January. However, vehicle sales improved on a yearly basis having advanced from -1.15 to 0.2%.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Fluctuate
Given that so much rests on the Eurogroup meetings, and with oil prices volatile, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to fluctuate on Monday. Tuesday will see EUR/AUD volatility with the Reserve Bank of Australia (RBA) publishing February’s meeting minutes and the German economic sentiment survey due for publication.
The Euro to Australian Dollar (EUR/AUD) exchange rate reached a high today of 1.4684.
