Australian Dollar Euro Exchange Rate Plummets as Commodity Prices Weaken
The Australian Dollar to Euro (AUD EUR) exchange rate fell on Friday as falling commodity prices dragged on the ‘Aussie’.
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Australian Dollar (AUD) Softened by Falling Commodity Prices
The Australian Dollar ended the week over a cent down against the Euro thanks to falling demand for commodities and rising risk aversion.
Prices for iron ore, Australia’s largest export, tumbled by nearly -4% overnight as concerns over a thick blanket of smog in Northern China lead to a cut in Chinese industrial production earlier in the week, causing demand to plummet.
While prices gradually began to rise again on Friday it was not sufficient enough to reverse trader’s dwindling risk appetite before the week’s session ended.
Euro (EUR) Rises as Markets Relieved by Monte Dei Paschi Bailout
The Euro crept higher on Friday as the Italian government announced that it would be bailing out its third largest bank, Monte Dei Paschi.
The announcement brought an end to weeks of speculation about the fate of the struggling bank, bringing a sense of relief to investors, who hope that the government will now be able to focus on pushing through much needed reforms for Italy’s banking sector.
AUD EUR Forecast: Lull in Data to Cripple Market Movement
The AUD EUR exchange rate may struggle to advance next week as a lull in data over the holiday period will provide little momentum for either currency.
The only notable release for next week will be the Australian Private Sector Credit report at the end of the week, which is expected to rise from 5.3% to 5.4% and may help the Australian Dollar rally from its recent losses.
Current Interbank Exchange Rates
At the time of writing the AUD/EUR exchange rate was trending around 0.68 and the EUR/AUD exchange rate was trending around 1.45