EUR/AUD Outlook: Bearish, as the rate is below its recent average and near its recent lows, creating downward pressure.
Key drivers:
• The European Central Bank's neutral stance on monetary policy contrasts with the Reserve Bank of Australia's potential interest rate hikes, which may support the Australian dollar.
• Oil prices have been volatile, recently above average, which impacts the euro indirectly, as energy supplies remain a pressing issue in the Eurozone.
• Australia’s robust GDP and industrial production data from China continue to enhance demand for the AUD, bolstering its position against the euro.
Range: The EUR/AUD is likely to drift in its recent range as the euro remains pressured.
What could change it:
• An unexpected shift in the ECB's policy towards more aggressive interest rate hikes could strengthen the euro.
• A downturn in China's economic recovery may decrease demand for Australian exports, weakening the AUD.
