The Euro (EUR) is placed in a difficult spot, the currency is under a huge amount of pressure based on the Russia/Ukraine war compromising growth prospects and the EU is forced to put inflation risk on the back burner for now. The annual inflation in Euroland rose to a fresh high of 5.8% in February from 5.1% in January well above market projections of 5.4%. Expectations are for the ECB to defer any Asset Purchase Programme decisions until their April meeting given the geopolitical tensions. ECB interest rates should remain at or below current levels until inflation reaches its target band. Commodity prices should continue to support the AUD as investors sell the vulnerable EUR – for now.
Exchange Rates:
The current interbank midrate is: AUDEUR 0.6622 EURAUD 1.5101
The interbank range this week has been: AUDEUR 0.6417- 0.6633 EURAUD 1.5076- 1.5582