The AUD to EUR exchange rate is currently range-bound, showing resilience despite recent fluctuations.
Key drivers include an interest rate differential as expectations rise for the Reserve Bank of Australia (RBA) to increase rates, contrasting with the European Central Bank (ECB) maintaining a cautious approach towards euro strength. Additionally, rising commodity prices are providing support for the AUD, while a weaker USD offers some relief. Economic growth projections within the eurozone are positive, which may benefit the euro, although caution from the ECB regarding exchange rates limits upward momentum.
The near-term trading range for AUD/EUR may stay stable, around current levels, moving within a modest range. Upside risks include unexpected positive data out of Australia or further eurozone economic challenges, while downside risks may stem from a risk-off sentiment globally or negative local data impacts.
Recent oil price volatility could also weigh on market sentiment, as lower oil prices may hinder the euro's strength, especially given the ongoing energy landscape shifts.