The Euro to Australian Dollar exchange rate was softer on Thursday as positive trade and retail sales data supported the ‘Aussie’ and as the markets settled into a waiting pattern ahead of the European Central Banks (ECB) Policy meeting.
The Euro to Australian Dollar exchange rate eased to the region of 1.406
Data released in Australia showed that the nation’s retailers are enjoying their best period since the global financial crisis, a stark contrast to their European counterparts who have seen sales fall steadily over the past few months.
According to the Australian Bureau of Statistics, Retail sales in the country rose for a second month in a row in July as Australians spent $23.3 billion at the nation’s stores. Spending increased by 0.4% month on month and rose by 5.9% on an annual basis.
The data shows that consumer concerns over the Federal budget and tax rises have eased. Spending was thought to have been boosted by a cold July, low interest rates and a surging property market.
‘5.9% year-on-year growth is about the best we’ve seen since the global financial crisis. The fact that we’ve been seeing some fairly positive growth over the past 12 months, despite hiccups like the federal budget and unseasonably warm weather seems to bode particularly well for what we might get by the end of the year,’ said Margy Osmond, Chief Executive of the Australian National Retailers Association.
Also lending support to the Australian Dollar was the publication of the latest trade data. The report showed that the nation’s trade deficit narrowed more than forecast in July. The deficit narrowed A$1.36 billion, which was smaller than the forecast figure of A$1.51 billion and down from June’s deficit of A$1.56 billion.
All eyes are now focused upon the European Central Bank and economists are torn as to whether Mario Draghi should introduce a quantitative easing programme in order to assist the flagging European economy.
Some are warning that such a move could prove to be disastrous.
‘ Monetary policy alone cannot and will not return the Eurozone to sustainable growth, Improvements in labour markets and the investment climate, sustainable fiscal reforms and a shift of public spending towards growth-boosting investments in infrastructure and education are what Europe must focus on now,’ said Michael Heise, chief economist at German Insurance Group Allianz.
Depending on what if anything is announced at the meeting the Euro is forecast to experience volatility against its major peers.
Euro Exchange Rate News:
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