The AUD to EUR exchange rate was trading at lows last seen in December 2018 and August 2019, as the spread of the Coronavirus has failed to escalate further from a recent spread into the Eurozone. The virus had led to a lockdown in a region of Northern Italy before new cases emerged in Croatia, Switzerland and Austria. The number of new cases has not grown overnight, and this has led to the Euro continuing its recent strength against the Aussie. The AUD v EUR was trading 0.5% lower and just below the 0.6000 figure on Thursday.
Economic Data on Friday Will Determine the Next Path for the Euro
Tomorrow’s European session sees the release of French Gross Domestic Product (GDP). Analysts have forecast that the French economy will see growth of 0.8% and any significant change to that figure will affect the Euro currency.
Later in the trading day, the release of German unemployment and consumer prices could have a bigger effect on the currency. The change in German unemployment is forecast to be 5k after last month’s negative 2k figure. Consumer prices for February are forecast to be 1.7%. If the figures show any hint of softening prices, then we can expect the Aussie to rally against the Euro.
Next week will see German retail figures and more importantly, Italian GDP. Italy has been struggling to avoid recession in recent months and the lockdown of the manufacturing region of Lombardy due to the Coronavirus may not help matters but this will appear in later numbers. Another headline risk to the Euro in coming sessions is the EU trade talks with the U.K., where both sides seem unwilling to accommodate the other.
Coronavirus is Still Creeping into the Eurozone
The stock market in Australia was 4% lower on Thursday as global markets continued to see risk assets sold off amid a spread in the Coronavirus. The pan-European Stoxx 600 was now 10% off from a February 19 record high. Norway, Denmark and Estonia were countries that all announced their first Coronavirus cases, while the U.K. saw another two.
Despite the fall in stocks, the spread of the Coronavirus throughout Europe has not translated to strength in the Aussie dollar as traders shrug off the effects that the virus may have on growth in the European economies.
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