The Euro vs Australian dollar exchange rate continues to swing wildly as the markets react to all the latest coronavirus developments. The Euro has made gains against the Australian dollar since last Friday when the dollar saw a sharp fall in price Overall the Australian dollar has struggled since mid February when rates for EUR to AUD went sky high. The movement of funds out of the commodity currency has seen considerable weakness in the Australian dollar. Yesterday saw a huge rise in the number of coronavirus cases down under which is likely to have a negative impact on the dollar moving forward. Those with pending requirements to either buy or sell Euros would be wise to make contact and consider the option available to manage your exposure on the volatile currency markets.
The Australian dollar could be negatively impacted if the country is unable to keep a lid on new cases appearing. The concern will be that the Australian economy could head for a recession. With global expected to slow dramatically in the short to median term the Australian dollar is one currency that is impacted particularly badly in time of economic uncertainty.
The likely impact of coronavirus on China’s trade also bodes extremely badly for the Australian dollar exchange rates due to the high volume of exports that Australia sends to China in the form of commodities and minerals. How the Reserve Bank of Australia responds will be crucial in determining where rates for EUR vs AUD move from here.
You only need to look at a similar situation in New Zealand where the central bank has had to move decisively. To put things into perspective the Reserve Bank of New Zealand introduced a $30 billion quantitative easing package following in the footsteps of other central banks around the globe.
In the Eurozone Purchasing Managers Index data released yesterday for the manufacturing and services sectors disappointed the markets indicating contraction. The services sector in particular dropped rapidly from 52.6 to 28.4. For the EU it has had to battle with weak growth, low inflation, the US China trade war, Brexit and now Coronavirus.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.