The Australian Dollar to Euro (AUD/EUR) exchange rate was tending within a tight range during the European session.
With trader risk appetite dampening considerably as oil prices continue to hold below $45 a barrel, the Australian Dollar softened versus the majority of its most traded currency competitors. Additional declination can be attributed to a stronger Chinese Yuan with the Federal Reserve disappointed rate hawks after the Federal Open Market Committee (FOMC) held the cash rate.
The Euro, meanwhile, softened versus the majority of its most traded currency competitors after talks between the Eurogroup and Greece hasn’t led to an amicable resolution. Heightened fears that Greece will exit the Eurozone are weighing on investor confidence.
The Australian Dollar to Euro (AUD/EUR) exchange rate is currently trending in the region of 0.7167.
As described above, cool trader risk appetite has weighed on demand for the high-yielding ‘Aussie’ (AUD). Risk-aversion was triggered by tanking crude prices as global supply exceeds demand. The situation between Greece and Eurogroup officials is also having an effect on risk-appetite.
‘The uncertainty over the lack of progress in negotiations and the negative news flow has affected sentiment,’ one banker told Reuters. ‘It’s not a huge amount. But the worry is whether this is the start of a trend that could get worse.’
Australian economic data also produced some disappointing results which weighed on demand for the South Pacific asset. RBA FX Government Transactions declined from -325 million to -434 million in February. RBA FX Other Transactions dropped from 56 million to 33 million, but regular RBA FX Transactions did improve from 296 million to 109 million.
The Australian Dollar to Euro (AUD/EUR) exchange rate dropped to a low of 0.7145 today.
With EU officials urging Greece to hurry up with producing a program for repaying creditors, the frayed relationship between Greece and other European economies suggests to many that Greece will have no choice but to leave the Eurozone.
‘There remains a very tough way ahead,’ German Chancellor Angela Merkel said. Greece must understand that international aid brought with it an obligation ‘to reform its budget and work towards one day no longer needing help.’
‘It is naturally fully clear that nobody can expect a solution to Greece’s problems this evening in Brussels or on Monday,’ said the German chancellor, in reference to a planned meeting with Greek Prime Minister Alexis Tsipras in Berlin on Monday.
With the Reserve Bank of Australia’s Governor Glenn Stevens making a speech on Friday, and with commodities volatility provoking changes for the South Pacific Asset, the Australian Dollar to Euro (AUD/EUR) exchange rate is likely to fluctuate.
The Australian Dollar to Euro (AUD/EUR) exchange rate has reached a high today of 0.7210.
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