The Australian Dollar Euro (AUD EUR) exchange rate rallied in the European session overnight on Tuesday as Germany posted some lacklustre trade stats.
Euro (EUR) Slides as German Exports Plummet
The Euro edged slightly lower on Tuesday as Germany reported a sharp drop in both the country’s import and exports in June.
According to data published by German stats office Destatis, imports contracted by 4.5% at the end of the second quarter, while exports also suffered a 2.8% drop, a notable decline from the respective 1.3% and 1.5% growth witnessed in the previous month.
However the larger fall in imports still led to Germany’s trade surplus strengthening in June as it rose from €22.0bn to €22.3bn, which will likely prompt further criticism that German dominance in European trade.
However AUD EUR’s gains were minimises as observers remain confident that June’s fall in trade is not a sign that Germany’s economic growth is beginning to slow, and that it will rebound over the coming months.
ING Bank economist Carsten Brzeski said;
‘Even though this morning’s trade data add to a disappointing month for German industry, we don’t think that the German economy has suddenly passed its peak. Instead, strong confidence indicators point to a continuation of the recovery.’
Australian Dollar (AUD) Lifted by Rising Business Sentiment
Meanwhile the Australia Dollar trended higher yesterday thanks to the release of Australia’s latest Business Confidence data.
According to the National Australia Bank (NAB) the firms surveyed were increasingly optimistic in their economic outlook, with the confidence index surging from 9 to 12 as improving employment conditions and further global recovery improved sentiment.
However analysts remain concerned about the future of Australia’s retail sector as Australia second largest source of employment continues to show signs of slowing, with increasingly uncertainty surrounding Amazon’s recent entrance into the local marketplace and what impact it could have on shopping habits.
AUD EUR Forecast: Australian Consumer Confidence to Improve?
Looking ahead the AUD EUR exchange rate may pushed higher again later today following the release of the Australia’s latest Consumer Confidence figures, with analysts forecasting that the index will push higher in August.
Meanwhile the Euro may also struggle again tomorrow as economists predict that Italy’s Industrial Production will have slipped in June with growth slowing from 0.7% to 0.2%.
Current Exchange Rates
At the time of writing the AUD EUR exchange rate was trending around 0.6707 and the EUR AUD exchange rate was trending around 1.4908.