EURAUD definition

EUR/AUD is the exchange rate between the euro and the Australian dollar, showing how many Australian dollars one euro will buy. It is a cross rate, traded directly rather than through the US dollar, and it sets a large, defensive reserve currency against a cyclical commodity currency. Liquidity is good for a cross though still below the dollar majors, and the pair has no common nickname.

The euro is the base currency and the Australian dollar the quote currency, so a quote of 1.6400 means one euro is worth 1.6400 Australian dollars. A rising price means the euro is strengthening against the Aussie, a falling price the reverse. You trade EUR/AUD as a forex CFD, taking a view on the price rather than owning the currency itself: go long if you expect the euro to rise, short if you expect it to fall. Moves are counted in pips at the fourth decimal place, and your result is the pips gained or lost multiplied by your position size.

This cross plays the eurozone against the China-and-commodities complex. The euro reflects ECB policy and euro-area growth, while the Australian dollar tracks Chinese demand, iron-ore prices and the Reserve Bank of Australia, so the pair often rises when commodities and risk appetite weaken and falls when they strengthen. That makes EUR/AUD a useful gauge of relative risk sentiment between a defensive bloc and a growth-sensitive one.