Over the course of last week the ‘Aussie’ enjoyed a largely bullish relationship with its major rivals as the Reserve Bank of Australia’s more optimistic economic outlook buoyed the currency.
The Australian Dollar’s advance on the Euro was aided by disappointing retail sales figures for the Eurozone and a surprise drop in German factory orders.
However, the ‘Aussie’ begins a new week in a softer position against its European counterpart as investors forecast that Thursday’s employment data will show that the Australian unemployment rate rose in January.
During the local session the Australian Dollar also edged lower against the ‘Greenback’ and Pound.
The Australian economy is expected to have added 15,000 jobs after shedding 22,600 positions the previous month.
The jobless rate is predicted to have edged up from 5.8 per cent to 5.9 per cent – the highest level since June 2009.
According to one Sydney-based strategist; ‘If the jobs number is strong then maybe the market sells off a bit further in rates and the currency gets some support. If we get a divergence between what commodity prices are doing and what the Aussie is doing, then that will start to worry the RBA again’.
News that Toyota Motor Corp intends to follow the example of General Motors Co. and Ford Motor Co. and stop making cars in Australia because of high manufacturing costs also lessened the appeal of the commodity driven currency.
Higher-risk currencies were also driven lower by the news that a gauge of Japanese consumer confidence declined from 41.3 to 40.5 instead of rising to 42.0 as forecast.
Japan’s Eco watchers outlook survey dropped from 54.7 to 49.0 in January.
In a comparatively quiet news day EUR/AUD movement could be inspired by today’s Eurozone Sentix investor confidence report.
As the data is expected to show that investor confidence declined in February, the ‘Aussie’ could recover ground against the Euro.
Tomorrow a stream of Australian data, including the nation’s business confidence and consumer confidence reports, could support the South Pacific asset, but we forecast that the Euro to Australian Dollar exchange rate will advance after Australia’s employment figures are published.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
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Euro,
Euro,
Euro,
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