Prediction for Lower AU Unemployment Rate Boosts Australian Dollar to Euro (AUD/EUR) Exchange Rate
The Australian Dollar (AUD) has advanced against the Euro (EUR) today, ahead of a potentially supportive AU jobs market announcement later in the week.
The minor AUD appreciation comes mainly on investor optimism rather than current Australian economic data, which has been relatively neutral.
The Reserve Bank of Australia (RBA) has released the minutes from its latest monetary policy meeting.
RBA officials have suggested that the next interest rate change will likely be a rate hike, but the cautious tone of the minutes has prevented an AUD/EUR exchange rate rally.
Euro to Australian Dollar Exchange Rate (EUR/AUD) Slides as Eurozone Confidence Stats Miss Forecasts
The latest Euro to Australian Dollar (EUR/AUD) exchange rate movement has been negative, with the single currency posting a -0.2% loss in the pairing.
This decline for the Euro (EUR) follows the news that ZEW economic confidence surveys for April have shown falling levels of optimism.
The readings for April have shown greater-than-expected reductions in economic sentiment, both in Germany and across the whole of the Eurozone.
Highlighting some of the reasons for this downturn, ZEW President Achim Wambach said;
‘The reasons for this downturn in expectations can mainly be found in the international trade conflict with the United States and the current situation in the Syrian war.
‘The significant decline in production, exports and retail sales in Germany in the first quarter of 2018 is also having a negative effect’.
Australian Dollar to Euro (AUD/EUR) Exchange Rate Forecast: Are Gains ahead on Falling Jobless Rate?
The Australian Dollar (AUD) could rise further against the Euro (EUR) this week, when the AU unemployment rate result for March comes out on 19th April.
The national jobless rate is predicted to show a reduction, from 5.6% to 5.5%.
This outcome could boost demand for the AUD, resulting in better Australian Dollar exchange rates.
Although falling unemployment in Australia hasn’t always led to rising wage growth, the hope is that there could soon be a breakthrough that brings higher salaries.
Lower unemployment and a faster rate of wage growth could increase the chances of the Reserve Bank of Australia (RBA) enacting a long-awaited interest rate hike.
Before the AU jobs market data is released, however, there could be a Euro to Australian Dollar (EUR/AUD) exchange rate rally on 18th April.
The day’s main Eurozone data, finalised inflation rate figures for March, is tipped to show a faster pace of price growth in virtually all fields.
Higher inflation across the Eurozone could would mean a move closer to the European Central Bank’s (ECB) 2% target, raising the chances of tighter monetary policy.
Since the ECB cut interest rates to 0% in 2016, Euro traders have been waiting for signs that stimulus measures like lower interest rates are no longer needed.
Higher inflation is part of a ‘healthier’ Eurozone, so the Australian Dollar to Euro (AUD/EUR) exchange rate could drop sharply if Wednesday’s data matches forecasts.