UPDATE
The Euro to Australian Dollar (EUR/AUD) exchange rate softened by around -0.34% on Thursday morning.
Despite protestations from many Syrizia MPs, Greek Prime Minister Alexis Tsipras managed to convince his government to accept the terms of the third bailout deal. However, with so many objections there will almost certainly be a cabinet reshuffle. Many analysts predict that Tsipras will face a snap election. Meanwhile, anti-austerity protestors took to the street armed with Molotov cocktails. Police responded with tear gas. The shared currency softened amid fears that Greece’s infrastructure is handing in the balance.
The Australian Dollar, meanwhile, edged higher versus many of its peers after July’s Consumer Inflation Expectation improved. However, gains may be short-lived with mounting tensions in Greece causing dampened demand for high-yielding assets.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4790.
Yesterday…
The Euro to Australian Dollar (EUR/AUD) exchange rate edged lower by around -0.15% on Wednesday morning.
Euro (EUR) Exchange Rate Forecast to Soften against the ‘Aussie’ (AUD) ahead of Greek MPs Decision
After the International Monetary Fund (IMF) condemned the latest Greek bailout proposal as unreasonable, pessimism regarding the likelihood that Syriza MPs will agree to the deal mounted significantly. The IMF stated that the deal was impractical without debt relief and that Greece’s debt could reach 200% of its gross domestic product. Greek MPs will be gathering tonight to decide whether to accept the deal which Prime Minister Alexis Tsipras has admitted is bad, although it was the best he could get. The shared currency edged lower versus its major peers as a result, with subdued volatility amid mounting uncertainties.
Many analysts are now predicting that Greece will be granted temporary leave of the Eurozone given that the subject of debt relief has divided Europe. Germany outright refuses to cut Greece’s debt, but the IMF say Greece cannot survive without a haircut. The MPs decision tonight will be enormously significant. If they reject the bill, Eurozone finance ministers are unlikely to be willing to re-enter negotiations.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4762.
Australian Dollar (AUD) Exchange Rate Forecast to Edge Higher against the Shared Currency (EUR) after China’s GDP Bettered Estimates
The ‘Aussie’ gained versus most of its major peers on Wednesday thanks to positive data results from the Far East. China’s second-quarter Gross Domestic Product was forecast at 6.8% on the year, but the actual result held at 7.0%. In addition, China’s Retail Sales and Industrial Production bettered estimates in June. As one of Australia’s largest trading partners, China’s positive data is good for the Australian Dollar.
In addition to positive data out of China, Australia’s economic data also produced mostly positive results. Although Consumer Confidence failed to impress, Motor Vehicle Sales bettered estimates on both a monthly and an annual basis in June.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low today of 1.4683.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Fluctuate on Market Sentiment
Given that so much rests on the Greek decision later tonight, and with an absence of domestic data to drive changes during Wednesday’s European session, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to fluctuate in accordance with market sentiment. Any hint that the deal will not be accepted is likely to cause the shared currency to slump versus its major peers.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.4786 today.