Australian Dollar (AUD) Crumbles against Peers, Euro (EUR) after Unpredicted Inflation Rate Dive

Australian Dollars (AUD)

The ‘Aussie’ (AUD) has been a poor prospect against its peers recently, with sizable losses being recorded across the board.

The Euro (EUR), by contrast, has been rallying, owing to a recent windfall in German economic announcements.

Australian Economic News: Seven Year-Low for Aussie Inflation Smashes AUD Appeal

The Australian Dollar (AUD) has been blighted with misfortune recently, as in addition to the price of iron ore disappointing investors, the national inflation rate crashed yesterday from 1.7% to 1.3% on the year for the first quarter, the worst outcome in seven years. Additionally, the quarterly printing dropped off from 0.4% to -0.2%.

Responding to the information, JPMorgan cited the news as supporting the likelihood of a Reserve Bank of Australia (RBA) interest rate cut in the future, stating that:

‘It is possible that the RBA points to GDP growth at 3% plus annualised in 2H15, an unemployment rate of 5.7% and stability in the price components of business surveys as factors which perhaps permits it to look through the downward surprise.’

Of late, the Australian Dollar has fallen by -1.9% against the Euro (AUD/EUR) and -2.1% against the Pound Sterling (AUD/GBP), with other pairing movements all being in negative directions. This unfortunately represents a repetition for earlier on in the week for the Australian Dollar’s appeal.

Euro (EUR) Advances along with German Consumer Confidence

While it has not managed a clean sweep of exchange rate advances against its peers, the Euro (EUR) has nonetheless been able to appreciate against most rivals recently owing to a supportive outcome for the German Gfk consumer confidence survey score for May.

Against expectations of stagnation at 9.4 points, a rise to 9.7 was recorded, which has set the German economy up on a strong footing for the impending month.

Among the single currency’s gains were rises of 0.4% against the South African Rand (EUR/ZAR), 0.8% against the New Zealand Dollar (EUR/NZD) and 2% against the Australian Dollar (EUR/AUD).

AUD, EUR Exchange Rate Forecast: German Ecostats on Tap, Australian Data Stack due Tomorrow

The next economic announcements that are likely to affect the AUD/EUR pairing are expected to come from the Eurozone, in the form of the German retail sales and unemployment rate results for March and April, respectively.

The only forecasts made so far have been for a stagnation of the unemployment rate at 6.2%.

The last notable Australian releases of the week are due on Friday, when the private sector credit results for March are due alongside a speech from RBA official Guy Debelle.

Recent AUD, EUR Exchange Rates

The Australian Dollar to Euro (AUD/EUR) exchange rate has been trending in the region of 0.6724 and the Euro to Australian Dollar (EUR/AUD) exchange rate has been trending in the region of 1.4877 during the European session.


Oliver has developed an expert understanding of the Forex market and the main drivers behind currency movement since entering the financial sector. He writes daily articles covering the latest shifts in currency for a range of sources online, as well as providing potential forecasts of future movement. This gives his followers all the information they require to protect their international money transfers from market exposure and currency risk. - View all posts by Oliver Meredew

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