The Australian dollar (AUD) has recently experienced a notable upward movement against the Euro (EUR), reaching 90-day highs near 0.5711, which is 1.4% above its three-month average of 0.563. The currency has traded within a stable range of 2.9% from 0.5548 to 0.5711. Market analysts attribute this strengthening to a combination of factors, including a prevailing risk-on sentiment and macroeconomic developments in Australia.
As Australian household spending surged by 1.3% in October 2025—the largest monthly rise in nearly two years—strong economic growth has propelled expectations for a more hawkish stance from the Reserve Bank of Australia (RBA). The robust GDP growth of 2.1% year-on-year in Q3 2025 has reinforced the AUD's position, leading to a reconsideration of the likelihood of further interest rate cuts and potentially opening the door for a rate hike.
Conversely, the euro has encountered pressures despite positive GDP revisions. Although the Eurozone saw an upward revision of its GDP growth, geopolitical tensions and the potential contraction in Germany's industrial output have weighed on the currency. Additionally, the euro's value faces headwinds from slight inflation upticks, which have kept the European Central Bank's (ECB) monetary policy stable amidst a generally cautious outlook.
Oil prices have also fluctuated, impacting the EUR's stability. Recent data show oil trading at 30-day lows near $61.94, significantly below its three-month average of $64.56, placing additional stress on currencies like the euro that are sensitive to commodity price movements. The higher inflation trends in the Eurozone, coupled with continued geopolitical uncertainty, suggest a complex outlook for the euro against the backdrop of stronger AUD fundamentals.
Overall, current forecasts indicate that the AUD is positioned to benefit from domestic economic resilience, while the EUR could face ongoing volatility. Currency analysts suggest that individuals and businesses engaged in international transactions may find favorable opportunities to transact in AUD amidst these dynamics.
