The Australian Dollar to Euro (AUD/EUR) exchange rate was trending higher on Friday as speculation surrounding the European Central Bank (ECB) and quantitative easing (QE) intensified.
The Australian Dollar to Euro (AUD/EUR) currency pai recorded a hefty 0.9% advance toward the close of Friday, despite weaker than forecast Australian figures.
The AiG Performance of Construction Index sank from 45.4 to 44.4 in December.
Furthermore, Australian Retail Sales figures showed only 0.1% growth in November, below 0.2% forecasts and a far cry from October’s 0.4% sales gain.
Meanwhile, the Eurozone had its own problems to deal with as after months of QE speculation an unnamed central bank member leaked plans for bond buying schemes. However, the ECB has been known to be slightly half-hearted when it comes to stimulus measures.
The ECB introduced a targeted long-term refinancing operation with the intention of boosting the balance sheet by 1 trillion Euros—a plan that failed.
However, after months of speculation that the only viable option left is for full-scale aggressive QE, the ECB finally seems to be doing something about the flat lining Eurozone. The unidentified source stated that there was now ‘clearly more of a consensus [to undertake QE] than before.’
However, unity among board members seems to be lacking. The source continued: ‘On the rest, there are still pretty much divergent views on the whole range of issued – volume, open-ended or closed, risk sharing or not, whether there are contingencies and which ones. It’s still very open.’
Any whiff of ECB QE action before the central bank makes its monetary policy announcement in the next few weeks could see the Euro exchange rate fall even further.
The Australian Dollar to Euro (AUD/EUR) exchange rate could feel the impact of several data releases next week. Monday’s Australian Home Loans report could see the ‘Aussie’ experience some movement.
Wednesday’s Eurozone Industrial Production stats come ahead of an influential day for the Australian Dollar to Euro (AUD/EUR) exchange rate on Thursday.
Australian Employment Change and Unemployment Rate figures could trigger notable ‘Aussie’ movement. Any negative figures could offer support to those economists who believe that the Australian economy is struggling.
As well as the Aussie labour market stats, German Gross Domestic Product (GDP) figures detailing the performance of the nation in 2014 will be out and could make for an interesting day of Euro trading.
The Australian Dollar to Euro (AUD/EUR) exchange rate is presently trending in the region of 0.6934. The Euro to Australian Dollar (EUR/AUD) exchange rate is hovering at 1.4428.
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