Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast to Trend Narrowly after Chinese Stocks Rise

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Euros (EUR)

The Australian Dollar to Euro (AUD/EUR) exchange rate was trending within a limited range during Tuesday’s European session.

AUD/EUR Conversion Rate was Trending Narrowly despite Weak European Data

After declining significantly in response to the slowest rate of Chinese growth since 2009 on Monday, the Australian Dollar recovered some of its losses during Tuesday’s London session.

The appreciation can be attributed to the Shanghai Composite Index which saw Chinese stock prices advance by 1.1%. Additional ‘Aussie’ (AUD) gains can be attributed to Reserve Bank of Australia (RBA) meeting minutes from the most recent interest rate decision. The minutes didn’t give any indication that policymakers want to alter their stance of holding the cash rate through to 2016.

Meanwhile, the shared currency edged higher versus many of its currency peers after the European Lending Survey revealed that Euro-area banks loosened loan standards thanks to the massive injection of liquidity from the European Central Bank (ECB).

This eased concerns that the Frankfurt-based central bank will look to expand quantitative easing during Thursday’s gathering. However, there is the potential for President Mario Draghi to attempt to talk down the Euro to combat overvaluation.

AUD/EUR Exchange Rate Forecast to Soften on Weak Commodity Prices

The Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.6414 during Tuesday’s European session.

With commodity prices continuing to soften in the face of concerns regarding China’s economic slowdown, the Australian Dollar is likely to maintain a comparatively weak position versus its major peers.

However, uncertainty regarding the timing of a Federal Reserve benchmark rate hike and the resultant weak US Dollar could support demand for the risk-correlated currency. China’s stock prices will also have an impact on the Australian Dollar, although recent robust gains could prove to be supportive in the long-term.

With Thursday’s ECB interest rate decision dominating trader focus, the Euro could see comparatively subdued trade over the coming days. Should Draghi attempt to talk down the single currency demand is likely to decline considerably.

Australian Dollar Exchange Rates during Tuesday’s European Session

The Australian Dollar to Euro (AUD/EUR) exchange rate was trending within the range of 0.6396 to 0.6432.

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending within the range of 0.4681 to 0.4613.

The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending within the range of 0.7243 to 0.7298.

The Australian Dollar to New Zealand Dollar (AUD/NZD) exchange rate was trending within the range of 1.0638 to 1.0766 during Tuesday’s European session.

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