Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast to Rally even after Greece IMF Loan Repayment

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Australian Dollars (AUD)

The Australian Dollar to Euro (AUD/EUR) exchange rate rallied by around 1.17% towards the end of Thursday’s European session.

After Australian economic data showed the performance of construction improved in March, the ‘Aussie’ (AUD) strengthened versus many of its most traded currency rivals. Additional appreciation is as a result of the hangover from the surprise move by the Reserve Bank of Australia (RBA), who kept the benchmark interest rate on hold despite expectations of a 25 basis cut. Also, improved market sentiment aided the high-yielding Oceanic asset.

The Euro, meanwhile, softened versus many of its most traded currency competitors. This is despite the fact that Greece managed to pay the first instalment of the loan from the International Monetary Fund (IMF) as promised. The declination is probably the result of speculation that Greece is now out of options in terms of the finance it requires to get out of their perpetual debt-cycle.

The Australian Dollar to Euro (AUD/EUR) exchange rate is currently trending in the region of 0.7212.

Australian Dollar (AUD) Exchange Rate Rallies on Market Sentiment

After oil prices gained a little, and with Greece meeting its debt obligations to the IMF on time as promised, trader risk-appetite improved significantly. This saw heightened demand for the high-yielding Australian asset.

Additional ‘Aussie’ appreciation can be attributed to positive domestic data results. The Performance of Construction Index improved from 43.9 to 50.1 in March. This shows that construction activity advanced from depreciation to growth. AiG reported; ‘The improvement in March was driven by a solid increase in house building activity which expanded after three months of contraction, and at a rate that was the strongest in five months. Apartment building activity continued to strengthen, with growth picking-up to its highest pace in four months.’

The Australian Dollar to Euro (AUD/EUR) exchange rate dropped to a low today of 0.7115.

Euro (EUR) Exchange Rate Softens despite Positive Data

In the main, European economic data printed positively during Thursday’s European session, led by an improvement in German Trade Surplus. However, the impact was insignificant against the backdrop of Greek woes.

Although Greece managed to repay the initial IMF loan in time, this did little to improve sentiment towards the single currency. This is due to speculation that Greece is now out of options and money to make further payments, with their debt reform proposal is still yet to get unanimous approval from the troika of creditors.

Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast to Hold Gains

Given the lack of domestic data to provoke changes, and with sentiment towards the shared currency shaky at best, the Australian Dollar to Euro (AUD/EUR) exchange rate is likely to hold gains for the remainder of Thursday’s European session.

The Australian Dollar to Euro (AUD/EUR) exchange rate climbed to a high of 0.7213 today.

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