The Aussie dollar has struggled against most currencies in mid 2021 including the Euro - falling to yearly lows.
The effect of Ukraine crisis on energy prices hurts the euro and helps the gas and oil exporting Aussie and have helped the AUD/EUR rate to rise back to 4 year highs trading around the 0.66 level (1EUR=$A1.5).
The euro has dropped 10 cents in one month and is down 2.7 per cent this year.
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Before the war in Ukraine started to affect the Euro, changing expectations around US Federal Reserve policy and a less positive outlook for global growth weighed on the Aussie to Euro rate last year dropping to 0.61 in September.
Note that forecasts and predictions for the AUD/EUR exchange rate change all the time, affected by news events and relative sentiment towards the Australian and Eurozone economies and this exchange rate is even more volatile than usual because of the uncertainties around the pandemic.
In late January and again in May the AUD slipped below the key 0.70 USD mark, its lowest level since mid 2020.
However, AUD is widely expected to rise to US75¢ by the end of 2022 – the Aussie dollar is forecast to have a volatile year against a range of currencies.
At the start of the tragic Russian invasion of Ukraine the euro sank to parity against the safe-haven Swiss franc hitting 0.9985 francs per euro on March 7th, the lowest since January 2015.
By the end of April the euro fell to a 5-Year low around 1.05 against the US dollar and the short term news for the single currency is all negative. Global bans against Russian oil and gas and uncertainty over ECB interest rate plans have prompted predictions in the currency markets for parity for the euro against the greenback this year.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.