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Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast: ‘Aussie’ Jumps after ECB QE Announcement

Euro Exchange Rates

Australian Dollar to Euro (AUD/EUR) Exchange Rate Surges 1.0%

In the wake of the European Central Bank’s (ECB) policy announcement, the Australian Dollar to Euro (AUD/EUR) exchange rate jumped to a high of 0.7054.

The ECB refrained from cutting interest rates but did introduce a QE programme worth 60 billion Euros a month.

The decision saw the Euro tank against the majority of its peers, with the currency losing over a percent against the Pound and US Dollar.

Earlier…

AUD/EUR Exchange Rate Trends in Narrow Range

With the Euro recovering losses against several of its main currency counterparts ahead of the European Central Bank’s hotly anticipated interest rate announcement, the Australian Dollar to Euro (AUD/EUR) exchange rate returned to trading in the region of 0.7066.

During the Australasian session the ‘Aussie’ received a modest boost in the form of an improved Westpac Consumer Confidence reading.

Overnight the AUD/EUR pair could fluctuate following the publication of Australia’s Consumer Inflation Expectation report.

The Australian Dollar to Euro (AUD/EUR) exchange rate achieved a high of 0.7107.

Earlier…

AUD/EUR Exchange Rate Maintains Stronger Position

Although the ZEW economic sentiment surveys for Germany and the Eurozone showed improvement, the Australian Dollar to Euro (AUD/EUR) exchange rate largely held on to gains ahead of tomorrow’s European Central Bank (ECB) announcement.

The 11-month high in sentiment had little impact on the Euro as investors fixate on the prospect of extensive stimulus from the ECB.

Separate figures showed that financial institutions from within Europe made it easier for personal/corporate clients to obtain credit in the fourth quarter of the year. According to RBC Capital Markets economist Timo del Carpio; ‘We view the latest survey as supportive of our view that actual lending to the real economy will begin to register positive growth rates in [the first quarter] after wallowing in negative territory for more than two years.’

Earlier…

The Australian Dollar to Euro (AUD/EUR) exchange rate advanced by around 0.3% on Tuesday to trade in the region of 0.7081.

AUD/EUR Exchange Rate Benefits from China’s Growth Data

Although commodity prices are still under extreme pressure, the Australian Dollar was able to advance on rivals like the Euro following the publication of China’s growth, industrial production and retail sales reports.

As China is Australia’s largest trading partner, positive economic reports for the Asian nation tend to bolster the ‘Aussie’, and this proved to be the case overnight.

China’s annual GDP was expected to print at 7.2% in the fourth quarter, down from 7.3% in the third, but it was actually unchanged.

Economist Jim O’Neill said of the result; ‘There is growing evidence that the Chinese economy is adjusting and achieving some so-called rebalancing. Given that marginal events in China are the number-one economic issue for the world economy, any sign of China moving in the right direction of rebalancing has to be extremely helpful.’

Industrial production, meanwhile, surged by 7.9% on the year in December, a larger increase than the 7.4% expected and an improvement on November’s annual figure of 7.2%.

The Australian Dollar to Euro (AUD/EUR) exchange rate achieved a high of 0.7096

China’s retail sales report similarly surprised to the upside, coming in at 11.9% on the year instead of the 11.7% expected.

The Australian Dollar advanced on peers like the Euro, Pound and US Dollar after the data was published.

Australia’s Roy Morgan Weekly Consumer Confidence Index also showed improvement, edging up from 112.0 to 113.6.

The Australian Dollar to Euro (AUD/EUR) exchange rate fell to a low of 0.7046

The news that Germany’s Producer Price Index declined by more-than-expected on both a monthly and yearly basis in December added to the Euro’s downtrend against the ‘Aussie’.

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

The Australian Dollar to Euro (AUD/EUR) exchange rate could experience additional volatility in the hours ahead as ZEW publishes Economic Sentiment surveys for both Germany and the Eurozone as a whole.

Positive figures would be Euro supportive, although the common currency’s gains are likely to be limited ahead of Thursday’s European Central Bank (ECB) announcement.

During the South Pacific session, Australian Dollar to Euro (AUD/EUR) exchange rate movement could be caused by Australia’s Westpac Consumer Confidence survey.

Another decline in sentiment could spell trouble for the ‘Aussie’.

The Australian Dollar to Euro (AUD/EUR) exchange rate is currently trending in the region of 0.7081

The Euro to Australian Dollar (EUR/AUD) exchange rate is currently trending in the region of 1.4117

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5420

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8208