- EUR/AUD declines sharply on a “combo” of the ECB deciding to cut interest rates and robust Australian employment data.
- The Euro weakened after the ECB decided to salami slice another 0.25% off its policy rates due to disinflation and weaker activity.
- The Australian Dollar was bolstered by employment data showing 64.1K people joined the workforce in September.
EUR/AUD falls by almost three-quarters of a percent to the 1.6180s on Thursday after a combination of stronger-than-expected Australian labor market data boosted the Australian Dollar (AUD) whilst the Euro (EUR) depreciated ahead of the European Central Bank’s (ECB) decision to cut interest rates, and remained under pressure as the bank telegraphed a mildly negative economic outlook for the region going forward.
EUR/AUD Daily Chart
The Aussie Dollar strengthened on Thursday, putting downward pressure on EUR/AUD after fresh data showed that the number employed Australians rose by 64,100 in September, which was well above expectations of 25,000 and the downwardly-revised 42,600 of the previous month. Of these, full-time employees made up the majority with 51,600, whilst the remaining 12,500 were employed part-time, acording to data from Australian Bureau of Statistics.
The Unemployment Rate, which had been expected to creep higher to 4.2%, actually remained the same as in August at 4.1%.
The data overall painted a picture of a robust labor market and reduced the chances that the Reserve Bank of Australia (RBA) will have to cut interest rates in the coming months, since high levels of employment are associated with higher levels of spending and inflation. This, in turn, supports AUD since relatively higher interest rates strengthen a currency by attracting more foreign capital inflows.
EUR/AUD declined further in the run up to the ECB meeting policy decision as investors expected the ECB Governing Council to take a dovish line (in favor of lower interest rates) due to recent data showing a marked slowdown of economic activity in the Eurozone.
Further, the second estimate of Eurozone Harmonized Index of Consumer Prices (HICP) released just before the ECB meeting revealed a downward revision in the headline HICP to 1.7% in September from the preliminary estimate of 1.8%, which itself was well below the 2.2% in August. The 1.7% revision plotted inflation well below the ECB’s 2.0% target.
The ECB policy statement indicated the governing council’s decision to cut the ECB’s three main interest rates, including the benchmark Deposit Facility Rate by 0.25% to 3.25% was taken because the “disinflationary process is well on track” and recent data showed “ downside surprises in indicators of economic activity.”
However, the statement gave no hint of whether the ECB was planning any further reductions in future meetings, retaining a “data-dependent and meeting-by-meeting” approach to monetary policy.
In her press conference after the decision, ECB President Christine Lagarde said that “Incoming data suggest that activity is weaker than expected," and pointed to “slowing employment growth.” Yet, she also spoke of labor market resilience and said she expected the economy “to strengthen over time.”
Lagarde further added that the decision to cut rates had been “unanimous” and added “all information since the September meeting was heading lower."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

Gold hits new all-time highs above $3,020, Trump-Putin call eyed
Gold price is printing fresh record highs above $3,020 on Tuesday as Middle East tensions intensify. Israel resumed military operations against Hamas in Gaza after the group rejected US proposals for extending ceasefire. All eyes now remain on the Trump-Putin call.

EUR/USD retreats from fresh 2025 highs, flirts with 1.0900
EUR/USD retreats from fresh record highs and approaches 1.0900 on Tuesday, helped by encouraging US data. Optimism around the German vote on the spending plan and Trump-Putin talks underpin the positive mood despite escalating Middle East tensions.

GBP/USD edges sharply lower after testing the 1.3000 mark
GBP/USD retreats sharply after testing the 1.3000 threshold, now hovering around 1.2950. The US Dollar made a strong comeback early in the American session, helped by upbeat local data and despite mounting geopolitical tensions in the Middle East. Focus also on Russia-Ukraine headlines.

Trump-Putin talks raise hopes of a ceasefire – Middle East risk returns
The prospective end to the Russia-Ukraine war has traders excited for a more positive growth outlook in Europe going forward, with heavily industrialised nations such as Germany having suffered under the weight of elevated energy costs in recent years.

Tariff wars are stories that usually end badly
In a 1933 article on national self-sufficiency1, British economist John Maynard Keynes advised “those who seek to disembarrass a country from its entanglements” to be “very slow and wary” and illustrated his point with the following image: “It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction”.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.