The Australian Dollar to Euro Exchange Rate has remained relatively stable this week trading in the 0.6766 – 0.6877 range. Volatility within the range caused most significantly by media developments in relation to the Greece debt crisis.
Last night provided the release of the European Central Bank (ECB) Account of the Monetary Policy Meeting of the Governing Council of the European Central Bank (MPC). ECB’s Chief Economist warning of the dangers of delaying the money printing process under the Quantitative Easing (QE) for the process of buying government bonds, ‘Due account would also need to be taken of the risks stemming from not acting at the present meeting, which might be higher than the risks stemming from acting.’
Additional news from this meeting surrounding the Greece bailout is the confirmation that Greece has now formally asked for a 6 month extension on its bailout agreement. Germany has rejected the proposal as ‘not a substantial solution.’ As the power house of the Euro-Zone economy, Germany has the strength behind them to have a significant impact on the shaping of the decision making process and the ability to close Greece out from the Euro-zone and possibility further ramifications. Concern from other officials is that if Greece is to leave it will cause bigger problems for the entire Euro-zone.
Italian Economy Minister Pier Carlo Padoan warned of the risk involved in any Greek exit.
‘We have to send a signal that the euro is irreversible,’ he explained that ‘If a country were to leave, it wouldn’t just mean one less country in the union but the transformation of the euro into a mechanism that can be undone.’
Greek Finance Minister Yanis Varoufakis insisted a deal was still possible even after Germany’s refusal, stating that he was ‘optimistic it would end well’. At this time many details are still uncertain.
Further developments will be released from the Eurogroup Meetings which continue during the offshore session tonight.
The AUD/EUR Exchange Rate is currently trading at 0.6853 at 8:30 AM AEST Today
Australian Dollar to US Dollar Exchange Rate (AUD/USD) unable to keep gains.
Australian Dollar to US Dollar Exchange Rate (AUD/USD) fell back below the 78 US Cents range during the off shore trading session, unable to hold the gains made after the US Federal Open Market Committee Meeting (FOMC) release Wednesday.
The Meeting Minutes were not as hawkish as the market was expecting.
There has been growing speculation by experts that The Fed will look to raise cash rates from as early as mid 2015, however the minutes indicated that Fed Officials will look to keep interest rates low for longer than initially expected.
Junichi Ishikawa, a market analyst at IG Markets Securities in Tokyo, told Bloomberg News. ‘The strong [US] dollar story may be coming to the point where it has to be re-evaluated.’
The US Released their Unemployment Claims figures last night which showed an improvement on the previous week at 283K, causing the US Dollar to make some recovery against the ‘Aussie’ overnight.
With no further significant data out locally, the Australian Dollar will experience fluctuations based on other Major economies releases.
The AUD/USD Exchange Rate is currently trading at 77.94 US Cents at 8:30 AM AEST Today.