The Australian Dollar was in high demand against a majority of its peers over Wednesday, rising significantly on supportive news from the commodities sector. The next direct news from Australia isn’t due for a while, however, so these gains could drop off before the weekend.
The Euro had a worse run in the middle of the week, losing out against most rivals on the news that confidence was dropping in the face of severe headwinds. Upcoming Eurozone news will focus on German surveys of business and consumer confidence.
The Australian Dollar made major gains against the Euro and most other rivals on Wednesday, thanks to news from Citibank that nationally important commodity iron ore was the best performing of 2016 so far, topping other valuable metals such as zinc and silver.
Responding to this unexpected windfall for iron ore producers, Citibank analysts said;
‘Given the abundance of easy to find and cheap iron ore and coal, no one could have predicted that the bulks would be generating among the best returns not just for this quarter but year-to-date as well’.
In a much less supportive development, the construction work figure for Q2 fell on the quarter from a prior -0.3% to -3.7%.
The Euro made little in the ways of positive progress over Wednesday, having dipped in the middle of the week on a number of damaging data releases out of the Eurozone.
Starting off this slide to 1.47 against the Australian Dollar was the Eurozone-wide consumer confidence flash for August, which fell from -7.9 to -8.5. Further woe for Euro investors came when the Finnish annual PPI for July dropped from -3.4% to -3.8%.
Bookending this negative news was a more mixed result, consisting of Germany’s finalised GDP growth rate for Q2. In line with forecasts, the quarterly result fell from 0.7% to 0.4% and the annual printing rose from 1.5% to 3.1%.
Finally, August’s business confidence for Belgium completed the rapid descent for Euro exchange rates by dropping from 1 to -3.1.
The next economic data likely to affect the Australian Dollar Euro pairing will come from the Eurozone, as no further Australian announcements are due until the coming week.
This afternoon’s Eurozone announcements will mainly focus on Germany’s Ifo surveys for August, covering opinions on business climate, current conditions and expectations. Helpfully for the Euro, forecasts have been for rises in all three fields.
Germany will also factor into Friday’s Eurozone economic news, when the GfK consumer confidence result for September is due. This has been predicted to fall fractionally from 10 points to 9.9.
Australia’s next contribution will come on Tuesday morning next week, where the July building permits result is predicted to rise from -2.9% to 2%.
The Australian Dollar Euro (AUD EUR) exchange rate has been trending in the region of 0.6773 and the Euro Australian Dollar (EUR AUD) exchange rate has been trending in the region of 1.4768 recently.
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