This morning we have seen the Australian dollar strengthen against the euro and has reached a high of 0.5601 on the interbank exchange rate, up over 1% on the day. This is still a long way of the higher levels we saw back in February this year where the Australian dollar to euro interbank exchange rate was over 0.6.
US Fiscal Stimulus Creating Optimism
Optimism was seen in the markets as reports emerged that the US Congress had reached an agreement on a $2 trillion emergency fiscal stimulus package. The Australian currency outlook looks more favourable today as a result of this news, but it is still very volatile with the events that are on-going worldwide with the Caronavirus and economic uncertainty. The Australian dollar has become more popular since the weakness we have seen recently on the currency has benefitted any Australian company that sells goods or services internationally as they can sell their goods or services cheaper to companies abroad.
Weaker Euro Data Calling for More Support?
Italy has been the worst affected country so far by Coronavirus, with more fatalities than any other country. The latest figures at the time of writing showed that 6,077 people have died from the virus in less than a month, with the number of confirmed cases reaching 64,000. However, concerns are that this figure could potentially be 10 times larger as testing has only been limited to those seeking hospital care, and many cases could have gone undetected.
The March reading for German IFO business survey was released at 9am this morning. The figure that was released came in lower at 86.1 against a forecast reading of 87.7, which is the weakest since 2009. German business expectations data for March released this morning also came in lower at 79.7 against a forecast 81.9. The market will focus on any official response by the European Central Bank and German Government on the sharp economic contraction ahead. There is support by Eurozone governments to use the European Stability Mechanism to provide credit lines to individuals and countries.
Euro/Australian dollar forecast could see the Australian dollar pull back against the euro from the recent lows seen on the 16th March this year when the AUD/EUR interbank exchange rate reached a low of 0.5052.
For more information on AUD exchange rates for an upcoming currency transfer, you can contact myself, Brett Goulty, using the form below.