The AUD v EUR exchange rate was trading lower again with a drop of 1% despite further action by central banks to calm markets. The AUD to EUR pair was trading at 0.5500 as the market continues its recent trend of Australian currency weakness.
Central bank stimulus measures fail to boost markets
Global markets were lower on Monday despite unprecedented actions by central banks to calm traders’ nerves. The New Zealand central bank cut interest rates by 0.75% to a record low and the US Federal Reserve also cut their benchmark rates again to zero in an emergency meeting, whilst announcing a $700 billion stimulus package.
The central bank moves have failed to have the desired effect as the stock market in the US is trading almost 4% lower and this is weighing on global markets. The continuing panic over Coronavirus has seen a host of countries moving to close social events, venues and public gatherings.
Economic data gives hope to Aussie bulls
The week sees the release of the Eurozone’s ZEW Economic Sentiment survey which can be a market mover for the Euro. The survey is sure to bring some gloomy prediction from business owners amidst the recent virus panic and may not have a big impact on the recent currency trend.
The key event for the week will be Thursday’s Australian employment data which has been a key piece of data for the Australian Reserve Bank when making policy decisions. The bank is expected to cut rates again at their next meeting and a better-than-expected figure may not bring a real change in trend but the Australian dollar can use all the help it can get to buck a recent trend of currency weakness.
Traders will continue to keep an eye on figures for the Coronavirus in various countered in order to gauge the next path for the currency pair. China seems to have contained the virus with only 22 new cases over the last day, whilst Australia saw 75. Europe continues to see additional cases with Austria adding 99 and others such as Denmark and Poland seeing additional cases As a collective there is therefore more cases coming though in Europe and it’s somewhat surprising that the Euro continues to advance against the Aussie currency when the economic implications may eventually be worse for the European single currency.
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