The EUR to AUD exchange rate currently exhibits a range-bound bias, holding steady around 1.7354.
Key drivers include:
- A tightening interest rate outlook from the Reserve Bank of Australia may push rates up compared to the European Central Bank's flexible stance.
- The outlook for Australian exports remains strong due to demand from China, which provides positive momentum for the AUD.
- The eurozone's projected GDP growth of 1.6% in 2026 reflects economic resilience, supporting the euro.
In the near term, the exchange rate is expected to remain stable within a narrow range.
Upside risks include any unexpected positive economic data from the Eurozone which could strengthen the euro. Conversely, a downturn in commodity prices, especially oil, could negatively impact the AUD, leading to a potential depreciation against the euro.