Best Time to Buy Euros With AUD: Is Now a Good Time?

Timing the foreign exchange market is a tricky task for the simple fact that so many variables play into the market's movements. It's also important to find the best exchange rates and avoid hidden fees when you buy Euros. However, online solutions like Wise can simplify the process for you by always offering you the mid-market exchange rate and by giving you auto-conversion tools.

In this article, we'll explore the factors that influence currency exchange rates between AUD to EUR and introduce you to Wise, which offers transparent, low-cost currency conversions. By the end, you'll have a better understanding of when to buy Euros with Australian dollars and how to ensure you're getting the best possible deal.

When Is the Best Time to Buy Euros With Australian Dollars?

On August 26, 2022, the exchange rate was 1 AUD = 0.698 EUR, which was the peak of the last 5 years. This would have been the best time to buy Euros with Australian Dollars. Conversely, the lowest point was on March 19, 2020, when 1 AUD = 0.529 EUR. This would have been the worst time to buy Euros with Australian Dollars in recent years.

The key is to buy when the AUD is stronger than the Euro, meaning 1 AUD will get you more Euros.

Exchange rate fluctuations are influenced by many complex factors, including economic policies, market sentiment, geopolitical events, and more. One significant factor in recent years (although just one possible explanation of many) has been the approach of Australia and the European Union to interest rates. From 2022 to 2024, both regions raised their interest rates, but the EU did so more quickly and aggressively. This approach helped the EU reduce inflation in their currency more relative to the AUD, impacting the exchange rate between the two currencies.

Factors That Influence AUD-EUR Exchange Rate Forecasts

Several factors can influence the exchange rates between two currencies, with interest rates being one of the clearest indicators to watch for:

Central Bank Interest Rates

Interest rates are a crucial factor influencing exchange rates because they are directly tied to a currency's value through inflation. By definition, inflation is the weakening of a currency's purchasing power over time. Central banks use interest rates as a primary tool to control inflation and manage the strength of their currency.

Central banks set interest rates on government debt, which has a rippling effect on consumer spending habits. When interest rates are high, the cost of borrowing money becomes more expensive. This discourages people from taking out loans or lines of credit. This reduced demand for credit leads to lower spending and decreased demand for goods and services. Consequently, businesses have less incentive to raise prices, which ultimately helps to keep inflation in check and support the value of the currency.

Conversely, when central banks lower interest rates, it becomes cheaper to borrow money. This encourages consumers and businesses to take out loans, leading to increased spending and higher demand for goods and services. As demand outstrips supply, businesses can raise prices more easily. This tends to fuel inflation and potentially weaken the currency's value over time.

Trends and Policies to Look For

When assessing the impact of central bank interest rates on exchange rates, look at the broader policy direction the central bank is trying to achieve over time. It is simply not enough to compare Australia's and the European Union's interest rates today.

It's also important to ask, are they raising rates to cool off an overheated economy and rein in inflation? Or are they lowering rates to stimulate a stagnant economy and spur growth? Understanding the central bank's policy objectives and the direction of interest rate changes over time can provide valuable insights into the potential future strength or weakness of a currency.

Other Critical Factors to Consider

• Economic Performance: A country with a strong economy, low inflation, positive trade balances, and robust economic growth typically has a stronger currency. When an economy performs well, it increases confidence in the currency and attracts more investment, driving up its value.
• Political Stability: Political unrest or instability can negatively impact a country's currency value. Investors tend to avoid currencies from countries with high political risk, as it introduces uncertainty and potential economic disruptions.

Is It a Good Time To Buy Euros With Australian Dollars?

As an Australian buying Euros, you will want to buy them when your Australian dollars are strong. However, exchange rates fluctuate constantly due to changes in global markets. As a result, it is incredibly difficult to predict or forecast when the Australian dollar will rise in strength relative to the Euro.

You can look at the recent announcements about interest rate changes by the countries' central banks. These are always on the public record. This information can help you decide whether the Australian dollar is sufficiently strong enough for you or if it's worth waiting for it to get stronger.

Monitor the AUD to EUR Exchange Rate

A more straightforward strategy is to keep an eye on the AUD-EUR exchange rate, and track how it is doing in comparison to the historic trend. You can easily find exchange rate data on Google or XE.com, which show the mid-market rate. These platforms allow you to adjust the view by 1, 3, or 6 months, 1 year, 5 years, or even the maximum available timeframe. This way, you get a clear picture of how the AUD has performed against the EUR over time, and how strong it is relative to the recent past.

If you’re aiming for a specific rate, consider setting up target rate alerts. Services like Wise offer these alerts in their app. You can specify the rate you’re hoping to achieve, and Wise will notify you if and when the rate hits your target. This way, you can convert your funds or make your payment at the optimal time.

At Monito, you can sign up for email alerts too. Our rate alerts will notify you when exchange rates significantly change and tell you which provider offers the best deal at that moment. Sign up after using our comparison engine.

What is the Best Rate to Exchange AUD to EUR?

The best rate to exchange AUD to EUR is the mid-market rate, also known as the interbank rate. This rate is the actual exchange rate that large banks use to trade currencies on the global market.

When you decide to buy EUR from traditional financial institutions, such as Austalian high-street banks or Western Union, they will charge hidden fees by offering weak exchange rates that are less favorable than the mid-market rate. This hidden fee, often referred to as an exchange rate margin, can add up quickly and significantly increase the cost of your currency conversion.

Open a Free Wise Account For Transparent and Low-Cost Currency Exchanges

Wise is our go-to online money transfer service that offers a user-friendly platform for exchanging currencies at the mid-market rate with transparent, industry-low fixed fees. Here are some of Wise's key features that make it an ideal tool for timing your currency exchanges:

1. Mid-Market Exchange Rates: Wise always uses the real, mid-market exchange rate, ensuring you get the fairest rate possible without any hidden fees or markups.
2. Low, Transparent Fees: Wise charges a small, fixed fee for each transfer, which is clearly displayed upfront, so you know exactly how much you'll pay.
3. Auto-Conversion: Wise offers an auto-conversion tool that automatically exchanges your currencies when the rate hits your target, ensuring you never miss an opportunity.
4. Rate Alerts: You can set up email or app alerts to notify you when the exchange rate reaches your desired level, allowing you to stay in the know about your favorable rates.
5. Multi-Currency Account: With Wise's multi-currency account and card, you can hold and manage multiple currencies in one place, making it easier to move money between currencies as needed. Spend your money like a local with the debit card.
6. Fee Free ATM Withdrawals: Wise lets you withdraw $100 US per month or equivalent without fees. Then a 1.75% fee applies.

Learn more: Read our Wise Account review or visit the Wise website

Compare AUD to EUR Rates With Monito's Comparison Engine

Fees fluctuate all the time. As a result, Wise will not always be the cheapest option to buy Euros with Australian dollars. To ensure you're getting the best deal on your currency exchange, run a search on Monito's comparison engine.

Monito monitors the rates and fees of all major money transfer competitors, allowing you to easily find the service offering the best combination of mid-market rates and low fees. By using Monito, you can rest assured that you're getting the most favorable exchange rate with no hidden costs.