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Since mid-February when the Covid-19 pandemic first really impacted on US equities, AUD/EUR has been quite closely correlated with the S&P 500. It is hard to see this pattern changing substantially in the next few weeks, per Westpac Institutional Bank.

Key quotes

“AUD/EUR is well below its long term average. Both Australia and the Eurozone are facing recession due to the coronavirus pandemic so Australia has lost its long-standing growth advantage.”

“AUD/EUR price action in March and into early April indicates that global risk appetite is the main driver of the pair short term. As such, it will be difficult for AUD to sustain rebounds.”

“Multi-week, AUD may be able to avoid retesting its March lows near 0.50 but a slip back towards 0.54 seems likely.”