EURAUD: Momentum with the euro for now - Westpac

The Australian dollar has trended lower against the euro in recent months and as is often the case, AUD has fallen more than EUR against a resurgent US dollar, points out Sean Callow, Research Analyst at Westpac.

Key Quotes

“AUD has also lost some yield support as Australia’s weak inflation pulse has caused markets to price in less risk of RBA tightening next year.”

“But the ECB’s loose monetary stance should help limit EUR gains/ AUD losses to the region of AUD/EUR 0.6350/75 or EUR/AUD 1.5700/50 into year-end. The strength of Australia’s job market and a potentially sharp rebound in Q3 GDP (6 Dec) could also help the Aussie on crosses.”