Sean Callow, FX Strategist at Westpac, expects renewed weakness in the shared currency, which should allow EUR/AUD for a target of 1.45.
Key Quotes
The ECB’s March meeting again disappointed euro bears, interrupting the AUD/EUR rally/ EUR/AUD slide from mid-Feb. But we expect EUR to come under renewed pressure in coming weeks and months as the ECB’s various new easing steps impact. AUD should also be fairly resilient in the weeks ahead, with the RBA on hold and key commodity prices well above Dec-Jan lows.
This should see AUD/EUR retest the 0.69 region, EUR/AUD slip to 1.45. However, during H2 2016, AUD is likely to lose ground as iron ore prices come back down to earth on growing supply and the Eurozone’s hefty current account surpluses help EUR stabilize.
(Market News Provided by FXstreet)