Last updated: January 20th, 2025
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 2025, could the Aussie dollar appreciate against the world’s second most-used currency?
As of 16 January 2025, you’d need around $165 Australian dollars (AUD) to buy €100 (EUR). Since 2025 began, the AUD/EUR exchange rate has hovered between €0.595 to €0.605.
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$1.64 on average throughout 2024, and is currently worth around AU$1.65.
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 reaching €0.63 by March 2025.
| AUD/EUR | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 |
|---|---|---|---|---|
| 0.63 | 0.61 | 0.62 | 0.63 |
Above: By March 2025, NAB thinks AUD/EUR will be €0.63.
ANZ head of FX research Mahjabeen Zaman said Trump’s policies have the potential to weigh more heavily on an already weakened euro, compared to a more services-driven economy like Australia.
She said regardless of how speculation about further US Federal Reserve interest rate cuts plays out, the US dollar would still get support from the rate differential relative to other major economies including the euro.
Important!
The US Federal Reserve made 100bp worth of cuts in late 2024, but stronger jobs data since then has led analysts to speculate cutting will be paused, or discontinued, in 2025.
JP Morgan is bullish on a US dollar buoyed by Trump’s election win that foretells lower global growth expectations and a Fed policy rate that will stay higher for longer.
Conversely, it sees the euro area as “the weakest link” in the global outlook due to its susceptibility to a trade war, and the bank’s forecast is for the EUR/USD to test parity in Q1 2025.
ING FX analysts agree the euro will likely underperform against the greenback, with downside risks peaking at the start of 2026:
The strength of the Eurozone economy will be a deciding factor.
- Its economic outlook is weak with growth projected to be just above 1% in 2025.
- Annual inflation was at 2.4% in December 2024, which was an increase from 2.2% in November.
- Political stability could be impacted by new leadership following the German federal election in February.
Vice President of the European Central Bank (ECB), Luis de Guindos said in January that risks to growth are tilted to the downside and high uncertainty could dampen confidence, consumption and investment.
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. Growth is forecast to decline by 0.1% in Germany in 2025 to just 0.7%.
What Is The Impact Of Monetary Policy On The AUD/EUR?
Although inflation in the eurozone isn’t quite within target — at 2.4% compared to its 2% goal — markets continue to price in more than 100 basis points of interest rate cuts by the European Central Bank (ECB) this year.
Did You Know?
Dialled back expectations of monetary easing from the Federal Reserve following the release of robust US jobs data in January saw the Aussie drop 0.9% and the euro weaken to a two-year low.
Demand for the AUD compared to the euro could improve given the Reserve Bank of Australia (RBA) kept Australia’s interest rates higher for longer.
If the anticipated 50-100bp of cuts by the RBA in 2025 eventuate, the differential between Australia and the eurozone would still favour appreciation of the AUD.
If the RBA doesn’t like how inflation is trending, the cutting cycle could be delayed further which could bolster the AUD in cross pairs. The next CPI print will be published by the ABS on 29 January 2025.
And retail sales figures released the same week were subdued. Currency strategist at Commonwealth Bank of Australia, Carol Kong, said:
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 November 2024, USD accounted for 58.79% of transaction value, while the euro was 13.07%.
Will The AUD Get Stronger In 2025?
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 2025 is slowing demand for our commodities, in large part due to China’s property sector downturn and slump in consumer demand.
Important!
Westpac’s Luci Ellis said in January that China has now reached ‘peak steel’ and Australia’s economy would need to pivot to achieve growth in export volumes.
Another risk is that US-China trade relations nosedive should Trump introduce aggressive tariffs — up to 60% on Chinese imports has been touted.
Important!
The World Bank forecasts China’s GDP growth to decline to 4.5% in 2026 and 4.0% in 2026, but suggested: “Growth could also surprise on the upside in China if policy makers were to implement further stimulus measures, boosting domestic demand.”
Final Word On AUD To Euro Outlook.
Forecasts are for the AUD/EUR to remain steady around in the range of €0.61- €0.63 in 2025 — meaning one euro is worth around $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/EUR exchange rate also rests largely on the policies, growth prospects and political tensions that emerge out of the US, Europe and China.
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.
Regular citizen says:
Unless you can see into the future or time travel, try to refrain from predicting a stronger AUD. It’s now Dec 2025 and contrary to all you top earning ‘economists ‘, the AUD ain’t shit.