The Australian Dollar fared poorly against the Euro yesterday, due to comments from the Reserve Bank of Australia (RBA).
The Euro performed well overall, although domestic data was in relatively short supply.
The Australian Dollar made notable losses against a majority of its peers yesterday, owing to the outcome of the RBA monetary policy statement that came in the morning.
While the earlier April construction index improved from 45.2 to 50.8, and services also came out beneficially, the RBA statement eclipsed this bright spot with its high levels of negativity.
Previous forecasts for inflation on the year to December were for 2-3%; these were dropped down to 1-2%, owing to:
‘broad based weakness in domestic cost pressures’.
Notable Australian Dollar losses included drops of -1.5% against the Chinese Yuan (AUD/CNY), the Euro (AUD/EUR) and the US Dollar (AUD/USD).
The single currency has been generally stable against its peers of late, with gains consisting of 0.4% against the Swiss Franc (EUR/CHF) and the Pound Sterling (EUR/GBP) and 1.7% against the Australian Dollar (EUR/AUD).
In spite of this apparent positivity, the biggest piece of Eurozone data yesterday, the April retail PMI, actually fell further into the contraction range from 49.2 to 47.9.
More supportive was the climbing Irish consumer confidence printing for the same month and the rising annual Spanish industrial production results for March.
The next notable data to affect the AUD/EUR pairing will come from Australia first, in the form of Monday’s NAB business confidence result for April. At present, forecasts have been for a drop from 6 points to 5.42.
Other Australian announcements to watch out for include Wednesday’s home loans results and Friday’s wage price index results for the first quarter.
On the Eurozone side, the biggest releases to be aware of will be Monday’s German factory orders results, Tuesday’s OECD economic outlook and German trade balance printings and Friday’s German and Eurozone GDP results for the first quarter of the year.
The Australian Dollar to Euro (AUD/EUR) exchange rate has been trending in the region of 0.6444 and the Euro to Australian Dollar (EUR/AUD) exchange rate has been trending in the region of 0.7907 of late.
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