Euro Exchange Rate Continues to Creep Down Against Australian Dollar

AUDGBP Makes Back Some Lost Ground From Last Week

Exchange rates for those looking to sell euros and buy Australian dollars have continued to creep back down over the course of the trading week, following a dramatic spike in the middle of March that had offered the best exchange rate from euros into Australian dollars that we have seen in over a decade, but it does seem like the trend has slightly shifted and the rate is starting to drop off a little.

There are quite substantial concerns that some of the economies that have been impacted the worst by COVID-19 (Spain, Italy, France) may now have a substantial hangover to deal with in the coming years and that their growth figures will be hit so badly that there could be a large amount of economic trouble on the horizon.

As an example, the Financial Times today have suggested that they feel we could witness over a 15% drop in Gross Domestic Product (GDP) for the Spanish economy, which may ultimately lead to their debt figures being 120% of GDP. This kind of situation was witnessed for a number of key European economies a number of years back and most still are far from out of the woods, so this ongoing global pandemic may start to really weigh heavily on euro exchange rates as the year progresses. Having dept at 120% of GDP is like the equivalent of a private individual having their credit card and loan payments each month not being covered by the wages they earn, which essentially makes the debt issue increased in severity until eventually action is required, such as a bailout as we saw with Greece a number of years ago.

Of course the Australian economy is far from out of the woods at present, with China shutting down for a sustained period of time and the Australian economy being fairly reliant on China there may be more to come from the economy over in Oz, inclusive of the large proportion of tourism that helps the economy move along that will also be lost.

The Reserve Bank of Australia (RBA) decided to keep interest rates on hold earlier this week but also noted that they would be prepared to act if the need arose, so the interest rates in Australia are one to watch fairly closely in case there is a move to cut rates similar to the move we have seen by both the Federal Reserve and Bank of England in recent weeks.

It is likely that predictions and forecasts will change significantly as the situation changes over the coming weeks, so if you have a sum of euros to exchange into Australian dollars or Australian dollars to bring back into euros then it is key that you get in touch with us by filling in the form below, so that we can keep you up to date with the very latest market movements every step of the way.