The AUD to EUR exchange slipped again as the latest round of PMI data showed slower growth in the Australian economy. The EUR v AUD was trading higher by 0.53% on the day, just shy of the 1.6400 level. The Euro has now recovered most of the losses suffered in the last two weeks after the pair fell from 1.6600 to lows near 1.6100.
Recent Data Adds Optimism to Eurozone Forecast
Recent economic data from the Eurozone are giving traders hope that the trading bloc has seen the worst of its growth slump and this has boosted the Euro currency this week.
The latest release of PMI data saw mixed fortunes for the Australian and European economies as data from down under showed a contracting manufacturing and services sector, whilst in the Eurozone, both sectors were showing signs of expansion. The data added fuel to yesterday’s rally, which was boosted by an upbeat set of meeting minutes from the ECB’s latest policy meeting.
The 1.6600 level has been a key resistance level for the EUR to AUD in recent years and it will be interesting to see if the euro can advance again or if Aussie strength will return. The Australian economic calendar is quiet next week but the ECB’s Lagarde is speaking at a conference and this will be followed in days after with a mix of business data and GDP growth figures from Europe.
Coronavirus Rears its Head Outside of China
Markets in Asia will be cautious heading into the weekend after cases of the Coronavirus doubled in South Korea overnight to 200. Japan has also seen some additional cases on the mainland bringing their cases to 85. These numbers are not high, but traders will keep an eye on the situation due to the recent impact on global supply chains and the risk of further spread.
The Australian stock market slipped from its recent record highs, but this was the case for global markets as Europe’s DAX was 0.7% lower. Many companies in Europe are warning of parts shortages after the recent factory closures from the extended Lunar New Year holiday in China. This could affect the economic picture in Europe further down the line, especially in manufacturing hubs such as Germany, which is the Eurozone’s most important economy.
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