UPDATE
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending within a limited range on Thursday morning.
The initial Euro uptrend, caused by news that the terms of Greece’s third bailout package have been finalised, has settled on Thursday morning. Many traders, having seen details of the latest aid package, are showing concern that the deal will not work and is only delaying the inevitable. German inflation data met with median market forecast figures which helped the common currency avoid depreciation.
The Australian Dollar, meanwhile, is holding a position of comparative strength amid speculation of a long delay to a Federal Reserve rate hike. Australia’s Consumer Inflation Expectations came in at 3.7% in August which helped boost demand for the South Pacific asset. Generally damp market sentiment, however, is likely to limit ‘Aussie’ (AUD) gains.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5130.
Yesterday…
Euro (EUR) Exchange Rate Climbs against the ‘Aussie’ (AUD) despite Poorf Eurozone Industrial Production
The Euro to Australian Dollar (EUR/AUD) exchange rate advanced by around 0.6% on Wednesday afternoon.
In response to news that Greece and Eurozone officials had agreed terms for the third bailout package, the shared currency rallied versus its major peers. The common currency continues to trend higher thanks to speculation that the Hellenic nation will secure funds before the payment due to the European Central Bank (ECB) on August 20th. It is worth noting that the deal still has to be passed by the Greek government, with dissenting Syriza party members determined to scrap a deal which they feel is contrary to their electoral mandate.
‘It is a very tough deal. The left had to either escape or take huge responsibilities and prove it can help society,’ stated Health Minister Panagiotis Kouroublis. ‘After this deal the prime minister should call for elections, so that the Greek people can vote on whether they approve the programme or want something else,’ he added.
Eurozone Industrial Production missed estimates on Wednesday but the result had minimal impact on the common currency with trader focus dominated by Greek geopolitical developments.
Australian Dollar (AUD) Exchange Rate Forecast to Dive against the Single Currency as PBoC Devalues Yuan
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.5184.
After the People’s Bank of China (PBoC) opted to intervene in the market in order to significantly devalue the Chinese Yuan, commodity currencies dived amid speculation of soft demand from the world’s second-largest economy. As a commodity-correlated asset, the ‘Aussie’ softened considerably versus its major rivals. There is now mounting speculation that the Reserve Bank of Australia (RBA) will be forced to ease policy in order to accommodate for the devalued Yuan and the dent in export demand.
Australian economic data produced mostly positive results, although influence from overseas weighed heavily on demand for the Oceanic currency. Consumer Confidence, Wage Cost Index and Credit Card Balances all either equalled or bettered previous figures.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.5066 today.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Hold Gains ahead of Australian Consumer Inflation Expectation
Given the extent of the rally, and with demand for commodity assets cooling, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to hold gains irrespective of the result from Eurozone Industrial Production. Trader focus, with regards to Euro trade, will now be on whether Greece and Eurozone nations can agree to the deal within their own domestic governments.
There will be several influential economic data publications on Thursday with the potential to provoke changes for the EUR/AUD exchange rate. Australia’s Consumer Inflation Expectation will be of interest to those trading with the South Pacific currency. In terms of European economic data, the German Consumer Price Index will be of significance.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.5301 today.