The ‘Aussie’ has been unstable against almost all of its rivals recently, owing to the fact that the threat of a Fed interest rate hike is now hanging over the national economy.
The Euro has been a similarly poor prospect overall, on account of recent domestic data doing little to inspire investment in the single currency.
The appeal of the Australian Dollar has diminished considerably of late, owing to domestic shortfalls in data releases and rising concerns regarding next month’s Federal Open Market Committee (FOMC) interest rate decision.
In the former case, while the national unemployment rate for April has remained at 5.7% instead of rising to 5.8% as expected, the rise recorded in the number of employed was lower than forecast, coming in at 10.8k instead of 12k. This came along with news that the participation rate on the month had dropped from 64.9% to 64.8%.
Moving further away, the latest Fed minutes have also been highly damaging for the ‘Aussie’, as the April meeting minutes have made a June interest rate hike a distinct possibility.
It is worth noting that a number of economists aren’t predicting the next hike until July at the earliest, when the dust from the EU Referendum is likely to have settled.
The poor Australian Dollar movement witnessed has largely been a repeat of last week’s faring.
The single currency has been a fairly poor performer against its rivals recently, owing to a limited supply of domestic data being compounded by poor ecostats concerning the Eurozone as a whole.
The latest contributor to the Euro’s devaluation has been the construction output stats for March, which have posted negatively on the month and the year.
Adding to uncertainty in the Eurozone has been the news that the Greek government has put forward a harsh austerity bill that must be passed by legal officials in order for the nation to obtain its next chunk of bailout funding.
Commenting on the difficult task the Government faces in getting the reform package passed, Euronews Business Correspondent Symela Touchtidou has said:
‘For the Greek government…this is the final test. Completing the evaluation of…and …disbursement of the next bailout instalment are the minimum prerequisites for the Greek economy to return to growth. But there is a contradiction: the new austerity measures, especially the big tax hikes, will deprive the country of the ‘oxygen’ it needs to grow’.
With no Australian data out until coming Tuesday, it will be up to tomorrow evening’s Eurozone current account stats for March to generate any further exchange rate movement. At the time of writing, forecasts were optimistic for the Eurozone as a whole with a rise from 11.1bn to 22.1bn on the cards.
The Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.6429 and the Euro to Australian Dollar (EUR/AUD) exchange rate was trending in the region of 1.5562 recently.
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