EUR to AUD Forecast & Outlook
In the near term, EUR/AUD is trading close to recent lows, holding near the 90-day average and within its recent range. The dominant driver remains the rate differential, with the euro supported by a rate hold and the Australian dollar pressured by ongoing RBA tightening. Conditions suggest the pair may face downward bias if risk-off sentiment persists. Near-term conditions may remain supported or slightly weaker, but the pair’s recent momentum indicates potential for further decline.
Transfer implications
- Expats: sending money to Australia may find conditions less favourable than recent levels if the pair declines further.
- Travellers: exchanging currency might face slightly higher costs when buying AUD compared to recent levels.
- Businesses: paying AUD invoices could see a weaker euro buying power if the USD or global risk sentiment remains downward.
Key drivers
- Rate gap: The euro signals a pause while RBA continues to tighten, widening the yield gap in Australia’s favour.
- Risk/commodities: Risk-off sentiment supports safe havens and pressures AUD and the pair as a risk-sensitive currency.
- Global factors: Eurozone growth outlook was downgraded, adding euro weakness pressure.
What could change it
- Upside risk: A reversal in risk sentiment or stronger euro data could push EUR/AUD higher.
- Downside risk: Further risk aversion or possibly a delay in RBA’s future hikes could deepen the pair's decline.
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