The AUD to EUR exchange rate is currently bearish, having recently dipped to 7-day lows near 0.5683.
Key drivers include the anticipated interest rate hike by the Reserve Bank of Australia, which may support the AUD as inflation rises. In contrast, the European Central Bank’s cautious approach, maintaining rates while warning against a strong euro potentially reducing inflation, creates downward pressure on the EUR. Additionally, positive economic forecasts for the eurozone, with projected GDP growth, lend slight support to the euro's stability.
In the near term, the AUD to EUR trading range is expected to remain steady, likely fluctuating within the current parameters observed over the past three months.
An upside risk could emerge if the RBA implements a surprise rate increase sooner than expected. Conversely, a negative impact may occur if geopolitical tensions escalate, harming investor confidence and further strengthening the USD, which traditionally weighs on the AUD.