The Euro to Australian Dollar (EUR/AUD) exchange rate advanced by around 0.25% on Thursday morning.
Although German economic data printed below expectations on Thursday, the single currency continued the advance imitated on Wednesday. The gains can be attributed to ongoing positive sentiment after Greece met with a €200 million International Monetary Fund (IMF) payment.
The ‘Aussie’ (AUD), meanwhile, softened from a sustained bullish run after labour market data produced disappointing results. Unemployment rose and Employment Change declined in April, although Part Time Employment Change advanced considerably.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4287.
Yesterday…
The Euro to Australian Dollar (EUR/AUD) exchange rate was trending within a limited range on Wednesday afternoon.
After Greece managed to repay the International Monetary Fund (IMF) €200 million on time, the shared currency strengthened versus most of its major peers. The advance was aided by relatively positive services data from Eurozone economies, although disappointing Eurozone retail sales slowed gains a little.
The Australian Dollar, meanwhile, advanced versus the majority of its most traded currency rivals despite producing mixed domestic data results. The advance can be attributed to continued support amid speculation that the Reserve Bank of Australia (RBA) will end its easing bias after having cut the benchmark rate to a record-low 2.0%.
The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4088.
Euro (EUR) Exchange Rate Strengthens on Services Data
With France, Spain and Italy registering improvement in their respective services sectors, the single currency gained versus many of its major peers. This promotes a sense of solidarity in Eurozone growth, as forecast by the European Commission.
Chris Williamson, Chief Economist at Markit said; ‘A key mantra from the ECB has been that monetary stimulus will only be successful if accompanied by structural reforms, and the survey confirms that those countries which have made the greatest efforts towards reforms are enjoying the strongest economic growth. Spain and Ireland in particular are both booming again. Companies in Spain are seeing the largest inflows of new work for 15 years, while Ireland is enjoying one of its longest growth spells since the dot-com boom.’
The main contributing factor to the common currency uptrend was the fact that Greece managed to meet with the €200 million IMF repayment on time, despite growing speculation that they would default.
The Euro to Australian Dollar (EUR/AUD) exchange rate dropped to a low of 1.4015 today.
Australia Dollar (AUD) Exchange Rate Advances despite Mixed Data
Although a benchmark rate cut would ordinarily send a currency into bearish territory, the recent cash rate cut from the RBA was met with an ‘Aussie’ surge. This is due to speculation that the easing cycle is now finished and that the next move will be a hike. The growing Sydney housing bubble is also likely to prevent further easing.
Australian economic data produced mixed results on Wednesday but it had minimal impact on the South Pacific asset. March’s New Home Sales gained by 4.4% on the month, significantly improving over the previous growth of 1.1%. However, March’s Retail Sales grew by 0.3% on the month, missing the median market forecast of 0.4%. Retail Sales ex Inflation saw a quarterly gain of 0.7% in the first quarter, failing to meet with the market consensus of 0.8% growth.
Euro to Australian Dollar (EUR/AUD) Exchange Rate Forecast to Hold Steady
Given the absence of domestic data to provoke changes, the Euro to Australian Dollar (EUR/AUD) exchange rate is likely to hold steady for the remainder of Wednesday’s European session. Thursday’s Australasian session ought to see heightened EUR/AUD volatility with influential Australian labour market data due for publication.
The Euro to Australian Dollar (EUR/AUD) exchange rate climbed to a high of 1.4126 today.
