Australian Dollar to Euro (AUD/EUR) Exchange Rate Holding Steady on Poor Risk Sentiment

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Euros (EUR)

The Australian Dollar to Euro (AUD/EUR) exchange rate is trending within a narrow range on Monday. This can be attributed to negative risk sentiment holding back the ‘Aussie’ (AUD) and disappointing data from the 18-nation currency bloc’s most powerful economy causing the Euro to depreciate.

The Australian Dollar to Euro exchange rate is currently trending in the region of 0.6767.

Australian Dollar Exchange Rate Slumps on Chinese Data

Monday’s economic data pertaining to China showed imports and exports declined significantly in November. Year-on-year Exports were forecast to slide from 11.6% to 8.0%, but the actual result dropped further to 4.7%. Yearly Imports also declined well beyond the median market forecast of a drop from 4.6% to 4.0%, with the actual result falling to -6.7%. The inequality between the figures meant that the  Trade Balance managed yet another record surplus having advanced from $45.41 billion to $54.47 billion.

The huge drop in imports in particular has amped anxieties regarding global economic disparity. Given the intimate trade relationship between Australia and China, poor trade data has a significantly detrimental effect on the opposing currency.

‘Despite another record surplus, the details paint a grim picture with slower export growth and a contraction in commodity imports in volume terms,’ said Andy Ji, senior currency strategist at Commonwealth Bank of Australia in Singapore.

Australian economic data has had little impact on ‘Aussie’ movement. Job advertisements rose from 0.2% to 0.7% and the Australian Manpower Survey dropped from 10% to 7%.

The Australian Dollar to Euro exchange rate dropped to a low today of 0.6726.

Euro Exchange Rate Softens on German Data

In the wake of disappointing German data, the shared currency depreciated against many of its major peers. German Industrial Production saw year-on-year growth of 0.8% in October, up from the previous figure of 0.1% but failing to meet with the market consensus of a 0.9% increase. On a monthly basis, industrial production declined beyond the median market forecast of a drop from 1.1% to 0.4%, with the actual result falling to 0.2%.

Evelyn Herrmann of BNP Paribas stated; ‘German industrial production might be quite wobbly over the next two months, masking what we expect to be an improving underlying momentum. November was scattered with strikes in Germany’s transport systems, notably in the railway sector, which could postpone a more dynamic growth pickup in Germany to early 2015.’

Eurozone Investor Confidence, however, improved from -11.9 to -2.5, but the data has had minimal impact on common currency movement.

Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast to Hold Steady

With a lack of domestic data to curb the trend, the Australian Dollar to Euro (AUD/EUR) exchange rate is likely to continue trending within a narrow range. That being said, there is the possibility of volatility late on Monday evening with the publication of the Australian weekly consumer confidence index.

The Australian Dollar to Euro exchange rate has climbed to a high today of 0.6778.

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