Central bank interest rate decisions were responsible for much of the movement seen in the EUR/AUD, EUR/CAD and EUR/NZD exchange rates on Thursday with the Bank of Canada (BOC) and Reserve Bank of New Zealand (RBNZ) both making policy proclamations. While the BOC decided to refrain from a cut, the RBNZ did slash the Overnight Cash Rate.
Euro to Canadian Dollar Exchange Rate News: EUR/CAD Trends Lower after BOC Leaves Interest Rates on Hold
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate slumped to a five-week low on Wednesday after the Bank of Canada (BOC) opted to leave interest rates on hold at its latest policy meeting, with the Euro to Canadian Dollar (EUR/CAD) exchange rate also registering declines.
In a statement the BOC remarked; ‘The stimulative effects of previous monetary policy actions are working their way through the Canadian economy.’
There had been concerns that Chinese growth fears and tumbling commodity prices would push the BOC into slashing borrowing costs for the third time this year, so the decision to leave policy unchanged was well received.
The ‘Loonie’ advanced on the majority of its currency counterparts and managed to extend gains against the Pound on Thursday as investors focused on the upcoming Bank of England (BoE) interest rate decision.
Demand for the Euro was also adversely affected by comments issued by the European Commission’s President, who asserted that no matter what the outcome of the upcoming Greek election, the nation’s third bailout is not subject to negotiation.
The Euro to Canadian Dollar (EUR/CAD) exchange rate was trending in the region of 1.4781, down 0.7%
Australian Unemployment Declines, EUR/AUD, GBP/AUD Exchange Rates Fall
After the Reserve Bank of New Zealand (RBNZ) cut borrowing costs the ‘Aussie’ posted widespread declines, dropping by as much as 1% against some of its rivals. However, the Australian Dollar staged an impressive rebound as the local session continued and domestic employment figures improved on forecasts.
Both the Euro to Australian Dollar (EUR/AUD) and Pound Sterling to Australian Dollar (GBP/AUD) exchange rates plummeted, with the former pairing losing over 1.85%.
The Australian unemployment rate eased from 6.3% to 6.2% in August after the economy added 17.4K positions in August, over three times the 5.0K job increase expected. The majority of the positions added were full time. With Australian data lacking for the rest of the week, further AUD volatility will be the result of global economic developments and market sentiment.
While the jobs data was largely upbeat, some industry experts remain cautious of the notoriously unreliable ecostat.
One ANZ economist asserted; ‘It is possible that the sharp rise in the official unemployment rate in July was partly the result of new and stricter government requirements for some jobseekers to receive unemployment benefits from 1 July. This would be the case if some respondents to the ABS labour force survey from 1 July now satisfied the ABS definition of unemployment due to more active job search steps now being undertaken to receive unemployment benefits.’
The Euro to Australian Dollar (EUR/AUD) exchange rate hit a low of 1.5778
Euro to New Zealand Dollar (EUR/NZD) Surges Close to Best Conversion Rate after RBNZ Rate Cut
The New Zealand Dollar put on a mixed performance ahead of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision and after the central bank announced a cut to its Official Cash Rate (OCR) the ‘Kiwi’ plummeted.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate achieved a high of 1.7968 after the cut was made public.
As forecast by economists, the OCR was slashed from 3.00% to 2.75%. RBNZ Governor Graeme Wheeler also remarked; ‘Some further easing in the OCR seems likely. This will depend on the emerging flow of economic data’.
While the NZD has moved away from the lows struck against peers like the EUR, GBP and USD in the immediate aftermath of the announcement, the threat of further rate cuts is likely to keep the New Zealand Dollar under pressure for the foreseeable future.
The Euro to New Zealand Dollar exchange rate is currently trending in the region of 1.7738