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EUR/AUD is comfortably above 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, per Westpac Institutional Bank.

Key quotes

“EUR/AUD 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.”

“Australia reported a current account surplus of A$10.2bn over 2019, 0.5% of GDP. Q2 and Q3 (then Q4) were the first consecutive surpluses since 1973. Lower surpluses seem assured in coming months, but still, this is unusually supportive of AUD on crosses.”

“Multi-week, EUR/AUD may avoid retesting its March highs near 2.00 but a push back towards 1.85 seems likely.”