EUR/AUD comes off 15-week high as Australia exports hit 10-month high

The EUR/AUD currency pair extended a pullback from recent 15-week high on Thursday following Australia’s trade figures for January and ahead of the outcome of the ECB’s March policy meeting.

Australia’s trade surplus was reported to have widened to AUD 11.027 billion in January from a revised down AUD 10.74 billion in December.

Exports rose 1.6% from a month earlier to a ten-month high of AUD 47.51 billion in January, mostly driven by non-monetary gold.

Australia’s total imports went up 1.3% to a three-month high of AUD 36.43 billion, mostly bolstered by non-industrial transport equipment.

Meanwhile, the European Central Bank is largely expected to leave the main refinancing operations rate unchanged at a 22-year high of 4.5% and the deposit facility rate – at an all-time high of 4%.

The ECB press conference will be closely watched for clues on the timing of the first rate cut.

ECB officials have agreed that it is premature to talk about interest rate cuts, despite recent indications of easing inflationary pressures across the Euro Area.

Markets are pricing about 90 basis points of rate cuts from the European Central Bank this year, with monetary policy easing expected to begin in June.

Currency Pair Performance

As of 8:53 GMT on Thursday the EUR/AUD currency pair was edging down 0.43% to trade at 1.6527.

Earlier this week, the minor Forex pair went up as high as 1.6744. The latter has been the pair’s strongest level since November 20th 2023 (1.6767).