AUD EUR Records Mild Losses as Chinese Trade Data Raises Concerns
The latest trade data from China has pointed towards a fledging trade war with America, concerning investors in currencies belonging to the Asian superpower’s other trading partners. AUD EUR has weakened on fears of the huge impact upon global trade that incoming US President Donald Trump could have.
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AUD EUR Declines Following Chinese Data Disappointment
China’s latest trade data startled investors after showing falling exports and a surprise weakening of the trade surplus against America; the first recorded since 2011.
While Yuan-denominated exports may have grown 0.6% in December, compared to forecasts of a -1.4% decline, overall exports fell -6.2% against predictions of a -3.8% decline. The overall trade balance weakened from US$44.61 billion to US$40.82 billion; an increase to US$47.55 billion had been forecast.
Slowing demand for overseas goods threatens the outlook of the Chinese economy. As a manufacturing hub, the world’s second-largest economy relies upon exports, so slowing demand from overseas could trigger a domino effect that sees reduced demand for Australian exports.
As a result, the Australian Dollar weakened.
EUR AUD Rises on Signs of Building Inflationary Pressure in Germany
Germany may have ended 2016 as a point of concern for traders, who worried that several months of poor data were signalling the Eurozone’s ‘powerhouse’ had turned into more of a ball-and-chain.
However, data has picked up since the beginning of the year and yesterday’s releases were no different. Although only considered low-impact data, the German wholesale price indices for December have showed strong rises on the month and the year.
Month-on-month price growth has climbed from 0.1% in November to 1.2%, while year-on-year growth accelerated from 0.8% to 2.8%. This bodes well for the inflation outlook; if business costs are increasing, consumer prices are sure to follow as a result.
AUD EUR Exchange Rate Forecast; Further Pressure from Chinese GDP Data?
Australian unemployment and employment change figures and the latest European Central Bank (ECB) interest rate decision promise to make Thursday a volatile day for trading.
Friday is also likely to see considerable AUD EUR exchange rate movement as fourth-quarter Chinese GDP figures will be released. Investors are looking for any signs of a slowdown; AUD EUR will likely plummet should they find any.
Interbank AUD EUR Exchange Rates
At the time of writing the AUD EUR exchange rate was trading around 0.70, while the EUR AUD exchange rate was trending in the region of 1.42.