A solid pushback by the Euro this week has seen prices in the Euro (EUR), Australian Dollar (AUD) cross push back to 0.6790 (1.4730) late Thursday reversing all of last week’s losses. Fitch has come out saying a eurozone recession is imminent as a result of the gas crisis, a full cut of the Russian gas line to the EU looks increasingly likely. Inflation in the Eurozone increased to 9.1% in the month of August, a 25 year high. Interestingly most of the inflation we see now was prior to the Ukraine invasion, made worse by energy spikes and post war sanctions. Next week’s key standout is the RBA release of policy and rates with a hike of 50 points to 2.35% expected. We expect normal Euro weakness to resume next week.
The current interbank midrate is: AUDEUR 0.6825 EURAUD 1.4652
The interbank range this week has been: AUDEUR 0.6784- 0.6936 EURAUD 1.4417- 1.4739