The current market bias for the AUD to EUR exchange rate is mixed.
Key drivers influencing the AUD include potential interest rate hikes from the Reserve Bank of Australia (RBA) due to rising inflation expectations, which might strengthen the currency. Elevated commodity prices are supporting the AUD, while the ongoing cautious market sentiment impacts its performance negatively. For the euro, the European Central Bank (ECB) has maintained a watchful eye on inflation and growth, with reluctance to see a stronger euro due to its potential effect on inflation control.
In the near term, the AUD/EUR trading range is anticipated to remain stable, with possible fluctuations driven by ongoing risk sentiment and new economic data releases.
Upside risks include stronger-than-expected commodity prices boosting the AUD, while a downside risk is posed by renewed geopolitical tensions in Europe, affecting the euro's stability and market perception. Overall, the AUD has recently traded around 0.5687, slightly above its three-month average, while the euro remains susceptible to broader economic factors.