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Currency Exchange: EUR/AUD Remains Steady after Inflation Data

The Euro to Australian dollar exchange rate remained steady after the German inflation data’s release.

The June’s preliminary estimation showed a slowdown on annual and quarterly readings. However, this doesn’t depict losses of the exchange rate between the two currencies.

The traders of currency focus on annual inflation at 2.1% being above the 2% target of the European Central Bank (ECB).

“Regardless of how inflation develops, the path of the ECB has been marked,” said Thomas Gitzel of VP Bank Group.

Ahead of the EU meeting, the Euro went near the opening levels against the Australian dollar.

Meanwhile, the Euro traded to AU$1.5756 which was the average weekly trading.

CURRENCY EXCHANGE – (GBPAUD) Rate of Exchange weakens onward Australian Inflation
CURRENCY EXCHANGE – The rate of exchange of GBP/AUD limps ahead of the Australian Inflation

June’s level of business confidence declined more than the forecast, however, there was an increase in services sentiment.

From 112.5 points, the measurement of an economic sentiment made a 112.3-point decrease. Despite this, it surpassed the 112-point forecast.

The data set an outstanding record while there was an unavailable display of the confidence scores’ outright drop.

There are existing concerns on the impact of US trade tariffs on EU at some time in the future.

“As long as the frictions are absent across emerging markets or between the Eurozone and its trading partners, the chances are high that the global recovery can continue,” UBS analysts said.

Currency Exchange: EUR/AUD Remains Steady after Inflation Data (GBP/AUD) Rate of Exchange weakens onward Australian Inflation

CURRENCY EXCHANGE – The Pound Sterling Australian Dollar (GBP/AUD) exchange rate weakened ahead of the Australian inflation.

The pound remained weak as the Brexit concerns linger in the market. President Donald Trump’s criticism against the Federal Reserve made the recovery of the demand for Australian Dollars in response to the declining dollar.

Meanwhile, the weakening dollar provoked investors in loading back into higher-yielding assets. Thus, this lifted the Australian dollar.

With the ongoing trade tensions, the general market volatility may pull the Australian dollar down for the following days.

However, Trump administration’s commentary may surge a movement for the Australian dollar exchange rate.

The Australian Dollar can have a renewed rallying point unless the consumer price index on Wednesday goes positive.

Moreover, the signs of inflationary pressure in Australia further increasing could boost the confidence of investors in the domestic outlook.

In the second quarter, the forecast pointed at a 2.2% CPI which lifted the inflation target rate of the Reserve Bank of Australia (RBA). The RBA policymakers could adopt an aggressive outlook for the following months and eventually support the AUD exchange rates.

However, RBA could place the interest rates on extensive hold if weaker inflation exists. This could also widen its policy divergence with other central banks such as the Bank of England and the Fed.

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  1. davichegz July 25, 2018

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