The AUDEUR interbank exchange rate was over 0.60% lower in the European session as traders continued to pile on the pressure on the Aussie currency. This move may not completely align with fundamentals but it will continue until a base is found for the Aussie to recover.
<h2>Markets still weak with Coronavirus worries</h2>
The stock markets are seeing big losses again with the U.S. Dow Jones index down over 6%, which is being mirrored in Asian markets, with the Australian index down 8%. The stock market moves are being driven by oil, which crashed to lows of under $30. This has hit the commodity firms hard and some action may be taken to remove the panic from markets. The crude oil price has traded at $28.00 today and this is close to the 2016 lows of $26.00, so there’s a chance that this will be tested.
<h2>Eurozone growth and Thursday’s ECB meeting will dominate</h2>
The economic calendar for the week sees a Thursday release of Eurozone Gross Domestic Product with a 0.9% figure expected. If the economy outperformed that number in Q4 then some continuation of the current euro strength is likely, but analysts are aware that Q1 data will disappoint and will be looking further down the line.
The other key event for the week is Thursday’s European Central Bank (ECB) meeting, where many expect the ECB to cut interest rates in order to stimulate the economy. The Eurozone already has interest rates at zero so it’s hard to see where they go next as the continual cutting of interest rates has failed to produce the desired results.
If the ECB does take some form of aggressive action then there is a chance that the Aussie currency could mount a rally against the euro after a recent slump. A recent Reuters poll saw the bank taking little action due to the fact that their deposit rate is already 0.50%, so this event will be closely watched by traders.
The AUDEUR interbank exchange rate was trading at 0.5830 and the recent support at 0.6000 has been breached. This will be the line in the sand for the market this week and the ECB meeting will likely be the catalyst for any real movement in the currency pair this week.
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