The ‘Aussie’ (AUD) has been a poor prospect against its peers recently, with sizable losses being recorded across the board.
The Euro (EUR), by contrast, has been rallying, owing to a recent windfall in German economic announcements.
The Australian Dollar (AUD) has been blighted with misfortune recently, as in addition to the price of iron ore disappointing investors, the national inflation rate crashed yesterday from 1.7% to 1.3% on the year for the first quarter, the worst outcome in seven years. Additionally, the quarterly printing dropped off from 0.4% to -0.2%.
Responding to the information, JPMorgan cited the news as supporting the likelihood of a Reserve Bank of Australia (RBA) interest rate cut in the future, stating that:
‘It is possible that the RBA points to GDP growth at 3% plus annualised in 2H15, an unemployment rate of 5.7% and stability in the price components of business surveys as factors which perhaps permits it to look through the downward surprise.’
Of late, the Australian Dollar has fallen by -1.9% against the Euro (AUD/EUR) and -2.1% against the Pound Sterling (AUD/GBP), with other pairing movements all being in negative directions. This unfortunately represents a repetition for earlier on in the week for the Australian Dollar’s appeal.
While it has not managed a clean sweep of exchange rate advances against its peers, the Euro (EUR) has nonetheless been able to appreciate against most rivals recently owing to a supportive outcome for the German Gfk consumer confidence survey score for May.
Against expectations of stagnation at 9.4 points, a rise to 9.7 was recorded, which has set the German economy up on a strong footing for the impending month.
Among the single currency’s gains were rises of 0.4% against the South African Rand (EUR/ZAR), 0.8% against the New Zealand Dollar (EUR/NZD) and 2% against the Australian Dollar (EUR/AUD).
The next economic announcements that are likely to affect the AUD/EUR pairing are expected to come from the Eurozone, in the form of the German retail sales and unemployment rate results for March and April, respectively.
The only forecasts made so far have been for a stagnation of the unemployment rate at 6.2%.
The last notable Australian releases of the week are due on Friday, when the private sector credit results for March are due alongside a speech from RBA official Guy Debelle.
The Australian Dollar to Euro (AUD/EUR) exchange rate has been trending in the region of 0.6724 and the Euro to Australian Dollar (EUR/AUD) exchange rate has been trending in the region of 1.4877 during the European session.
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