Last updated: September 3rd, 2024
The Australian dollar is generally weaker against the world’s major currencies including the US dollar, the British pound and the European euro. But with a somewhat bearish outlook for the euro in 2024, could the Aussie dollar appreciate against the world’s second most-used currency?
As of 27 August 2024, you’d need around $164 Australian dollars (AUD) to buy €100 (EUR). Since 2024 began, the AUD/EUR exchange rate has remained between €0.59 to €0.62.
Discover what the year ahead could hold for the AUD to EUR conversion rate.
Tip: Zoom out for better historical context of AUD/EUR performance.
How Has The AUD/EUR Performed?
The euro took a beating in 2022, depreciating against the US dollar in one of its worst-performing years. At one point, it lost 16% of its value against the greenback.
In July 2022, the euro lost parity with the US dollar for the first time in 20 years — it’s historically been worth more than the dollar.
(Related: AUD to GBP Expert Forecast).
Russia’s invasion of Ukraine naturally affected economies across the Eurozone due to supply chain disruptions, increased energy costs and increased fear and doubt among consumers.
Not coincidentally, it was the euro area’s worst year of inflation — reaching 10.6% in October 2022.
But recently, the AUD to euro pairing has been characterised by stability. One euro was worth AU$1.63 on average throughout 2023, and is currently worth around AU$1.64.
Did You Know?
While the European Union includes 27 countries, the euro (€) is the single currency across 20 member countries. The collective of countries where the euro is used is known as the Eurozone.
Leading AUD to Euro Forecasts For 2024-25.
The AUD to euro forecast from NAB sees the currency pair remaining at €0.61 in June through to September, before lifting slightly to €0.62 in the December 2024 quarter.
| AUD/EUR | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 |
|---|---|---|---|---|---|---|
| 0.61 | 0.62 | 0.62 | 0.63 | 0.64 | 0.64 |
Above: By June 2025, NAB thinks AUD/EUR will be €0.63.
ANZ sees the potential for positive upside for the AUD in 2024, especially if the USD weakens and global risk sentiment improves.
ANZ analyst Mahjabeen Zaman said the AUD stands to gain “against currencies where interest rates have eased aggressively.”
Important!
The US Federal Reserve Chair Jerome Powell confirmed in late August that the time had come to cut its policy rate. Expectations are for a cut of between 25 to 50 basis points in September, and possibly more before the year ends.
Demand for the AUD compared to the euro could improve given the Reserve Bank of Australia (RBA) looks poised to keep Australia’s interest rates higher for longer. But a strengthening of the Eurozone economy — and of the EUR/USD pair — could also balance out a modest appreciation of the Aussie.
Eurozone saw higher-than-expected GDP growth in the second quarter of 2024, and slowing but stubborn inflation:
- Its economy grew by 0.3% compared to an anticipated 0.2%.
- Annual inflation remained stable at 2.5% in June and 2.6 in July 2024 (the ECB target is 2%).
Important!
The European Union has the third-largest economy in the world behind the US and China, dominated by the GDP output of Germany, France and Italy — which all use the euro. Stagnant growth is forecast for Germany in 2024, and economists from the IMF described the country as facing “some serious economic challenges.”
What Is The Impact Of Monetary Policy On The AUD/EUR?
Upside inflation risk has kept all central banks cautious, but the tide is turning towards monetary policy easing.
Analysts foresee a significant cooling of Eurozone inflation in August to 2.2%, which flags the potential for further rate cuts by the European Central Bank (ECB). The ECB reduced its interest rate by 25 basis points in June, held in July and will next set policy in September.
Did You Know?
The Fed’s recent change of heart on rate cuts saw the EUR/USD briefly hit a 13-month high in August, trading at over $1.12 for the first time since July 2023.
The depth of cuts from both the ECB and the Fed will shape the euro’s strength moving forward.
But the Aussie could hold up well, given their cutting cycles will both be well ahead of the Reserve Bank of Australia (RBA).
The RBA isn’t seeing inflation trend downwards as quickly as hoped and may not cut rates at all in 2024.
ING Global Head of Markets Chris Turner said:
Turner said gains in employment seen in Australia, based on July jobs data from the ABS, would reinforce a delay to easing by the RBA — which should imply the AUD does well on cross-currency pairs.
Did You Know?
There are signs of decreasing activity around the euro. Between 2019 and mid-2023, the Euro made up around 30-40% of the value of transactions made on the Swift network. In March 2024, USD accounted for 59.5% of transaction value, while the euro was 12.13%.
Will The AUD Get Stronger In 2024?
The AUD/EUR pair’s exchange rate is also heavily influenced by how both currencies perform relative to the US dollar — a safe haven currency for investors.
A major headwind for the Australian dollar in 2024 is slowing demand for our commodities, in large part due to China’s property sector downturn.
Westpac’s Sean Callow said China’s property market has been under stress for years and its stock market has underperformed in 2024, triggering concerns among policymakers.
Another risk is that US-China trade relations nosedive around election campaigning in the US.
President Biden recently announced US tariff hikes on some Chinese imports, and AMP’s Deputy Chief Economist Diana Mousina said the hawkish US sentiment towards China “could get worse if Trump is re-elected in November (as he is proposing tariffs on all Chinese imports).”
Tao Ling, Deputy Governor of the People’s Bank of China, said the central bank will put up 300 billion yuan (US$42b) to finance loans to local state-owned enterprises for buying unsold apartments already built, which could improve liquidity for housing developers.
That’s on top of 935 billion yuan in lending by commercial banks to finish building up to 20 million pre-sold homes.
Conversely, the Chinese steel industry is facing a “harsh winter” according to the chairman of the world’s largest steel producer, and iron ore prices have plunged this year.
Important!
Westpac’s Market Outlook issued May 20 posits that China’s 5.0% GDP growth estimate for 2024 “is certainly achievable; and, looking to the long-term, all the investment being undertaken is developing a strong foundation for a sustainable, robust uptrend in national income.”
Final Word On AUD To Euro Outlook.
Forecasts are for the AUD/EUR to remain steady around the €0.61 mark in 2024 — meaning one euro is worth $1.64 Australian dollars.
A widening interest rate differential between Australian and European central banks could increase demand for the Aussie relative to the euro, but the impact is expected to be minimal.
The AUD could also strengthen relative to major currencies if China can navigate a clear path to its growth goals.
Jody
Nelson says:
I attempted to use the “hack” to dodge conversion fees, but sadly after converting AUD to USD on a Wise account, there doesn’t seem to be a way to deposit that money into eToro; i.e. eToro recently disabled Wire transfers and Wise doesn’t support SWIFT transfers for sending USD to a bank in the US?
John Keys says:
CMC Invest are an abysmal in turning around new accounts.
Over 1 month to setup up an account with an investment trust, and still waiting. I was promised 5 business days.
Reg Watson says:
Given that China’s economy is going down the toilet how the heck do we expect an appreciation of the Aussie in 2024 ? We are tied to China.