EUR/AUD is no exception as its fate is now determined by the fate of Russia's war with Ukraine. The euro reacted to these events with a crushing fall because the EU economy depends on Russia, no matter how much they would like it, and the influx of refugees will negatively affect the European economy and the unemployment rate. If the military conflict drags on for many months, then anything can wait for the euro up to default, because economic penalties will cost the EU economy billions of dollars every month..
The EU's macroeconomic indicators are already worsening. In particular, the ZEW index of economic sentiment in March, for the first time in 2 years, fell into negative territory and amounted to -38 points. However, even before the outbreak of hostilities in January, the trade deficit increased sharply by 5.6 times compared to the previous month. At the same time, a year earlier, in January, a surplus in the trade balance was recorded.
In the Euro-Australian dollar exchange rate, the Australian dollar came out on top, since the Australian economy, despite the increase in the cost of imported oil and gas, is less dependent on the situation in Europe. China is nearby, relations with which leave much to be desired, but from an economic point of view, trade is in full swing and so far, in the absence of sanctions against China, everything is relatively stable here. At the same time, it should be noted about the lowest unemployment rate in Australia for the last 13.5 years, which certainly increased the demand for AUD.
We can see a mild downtrend on the chart, but on February 25, for well-known reasons, rates plummeted to their lowest level in 5 years. We believe that this is a good time to buy Euros at the lowest price. On the one hand, at the moment we do not see any perspective for the end of the military conflict between Russia and Ukraine, which means that new lows can be reached. However, as soon as the signs of the end of the war become obvious, prices will immediately start rising up and we may not see the euro at such a low price. Therefore, our choice for the long term are the deals to BUY.
