The Australian Dollar to Euro (AUD/EUR) exchange rate climbed in the first half of Friday’s European session despite a rise in German Industrial Production.
The January figure managed to climb from 0.5% to 0.9% on the year, a far more favourable result than the -0.2% forecast.
Economist Andreas Rees commented: ‘The lower oil price lifts purchasing power not only in Germany but also abroad; hence, it is good news for internal demand and German exports alike. The weaker Euro exchange rate provides further tailwinds for export dependent companies.’
The January figure marked the fifth consecutive month of growth in the sector, showing the currency bloc’s powerhouse is still charging ahead.
The German ministry stated: ‘The positive result in January, as well as the upwardly revised data for the previous months confirm: the recovery of the German economy is continuing.’
However, as Germany continues to make a strong recovery, other nations within the Eurozone are still suffering.
Greece, for example, has been attempting to renegotiate its austerity deal. With a shockingly high unemployment rate and struggling growth, Greek citizens voted in radial left-wing party Syriza in the hope of them implementing change.
However, after being granted an extension of its current bailout programme, long-term negotiations continue and investors are becoming increasingly unconfident about Greece remaining with the currency bloc.
In addition, in spite of German opposition to the measure, the European Central Bank (ECB) announced it would be beginning quantitative easing (QE) on March 9th. Despite giving a press conference to detail the plan, ECB President Mario Draghi has been criticised for his vagueness on the topic—especially with no firm deadline in place.
Initially QE was thought to begin in March 2015 and extend until September 2016—however now Draghi has suggested that could go ‘beyond if needed’.
The Australian Dollar to Euro (AUD/EUR) exchange rate could fluctuate on the release of German Trade Balance and Sentix Eurozone Investor Confidence stats on Monday.
Meanwhile, Thursday will heat up for ‘Aussie’ trading with the release of Australian Unemployment Rate and Employment Change stats.
The Australian Dollar to Euro (AUD/EUR) exchange rate is trading at 0.7107. The Euro to Australian Dollar (EUR/AUD) exchange rate is trending in the region of 1.4076.
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