Currency News: UK daily forex news

Daily Rate Predictions For The US Dollar, Euro, Pound Sterling and Japanese Yen

John Cameron — Thu, 17 May 2012 18:00:00 +0100

The US DOLLAR has been the major winner on the day as institutional investors continue to shun equities and move into safe havens. This has taken the GBP USD exchange rate down to 1.5792. There could be further upside to come for the Greenback, as this afternoon’s US labour market data disappointed. This means that the USD heads into tomorrow on a NEUTRAL TO POSITIVE footing.

It was another ‘bad news day’ for the EURO as Spanish bond yields rocketed in anticipation of the potential knock-on effects of a disorderly Greek debt default. This morning’s Spanish GDP data was predictably disappointing, meaning that the single currency is expected to trade with a NEGATIVE bias moving forward. The current GBP EUR exchange rate stands at 1.2448.

The POUND STERLING’s recent strong performance in the currency markets appears to have well and truly run out of steam, following another weak showing for the UK tender today. A downbeat assessment of the UK’s economic prospects from Prime Minister David Cameron earlier on hasn’t helped. Cameron’s assertion that troubles in the eurozone are equally bad news for Britain has inextricably linked the Pound to the euro, meaning that Sterling is expected to trade on a NEUTRAL TO NEGATIVE footing in the near-term.

The JAPANESE YEN has stormed ahead in the markets today, outperforming all of the other sixteen most-actively traded currencies on the session. This has gone a long way towards proving that Japan’s currency is still considered an ultra-safe port during an economic storm. With Greece’s problems likely to multiply over the next five weeks, look out for a POSITIVE performance from the Yen in the near-term. The current GBP JPY exchange rate is 125.6300.

Australian and New Zealand Dollars Weaken Again As Bank of England Slashes UK Growth Forecast

Minesh Chaudhari — Thu, 17 May 2012 09:00:00 +0100

The Bank of England Governor Mervyn King called an instant halt to the Pound’s recent bull-run in the currency markets during yesterday’s session, when he announced that the Bank was slashing its UK growth forecast for 2012 by a third, from the previous 1.2% to a paltry 0.8%. King blamed the announcement on the threat to the British economy from the deepening eurozone debt crisis, observing that the region was ‘tearing itself apart’. UK Prime Minister David Cameron echoed King’s comments in parliament later on yesterday, when he advised eurozone policy-makers to ‘make-up or break-up’.

However, it wasn’t all doom and gloom for the UK economy, despite the best efforts of the BoE Governor; the release of the latest British unemployment figures during Europe’s morning session, showed that UK joblessness had dropped by 45,000 to 2.63m, during the first quarter of this year.

Meanwhile, in spite of the positive UK labour market numbers, European and US stocks continued to move lower as yesterday’s trading session unfurled, confirming the stringently ‘risk-off’ trading environment of recent days. This saw the usual suspects coming under selling pressure as the Aussie and Kiwi Dollars and the Rand lost further ground.

However, last night’s Asian session offered a chink of hope to investors holding equities, as Hong Kong’s Hang Seng and Tokyo’s Nikkei 225 indices registered healthy gains of 0.87% and 0.75% respectively. The uptick in Asian risk appetite was driven by the release of Japanese data which revealed that the country’s economy had expanded by a healthy 1.0% in the three months to the end of March 2012. This above-expectation level of GDP growth suggests that Japan’s giant economy is making significant headway in its post-Tsunami recovery.

Today’s Rate Forecasts For The Pound Sterling, Euro, US Dollar and Australian Dollar

David Woodsmith — Wed, 16 May 2012 18:00:00 +0100

The Bank of England slashed its forecast for UK growth for this year from 1.2% to 0.8% earlier today, hitting the POUND STERLING. With the UK tender riding high at the top if its recent range against a host of currencies, a broad move to the downside is possible, meaning that GBP heads towards tomorrow’s session on a NEUTRAL TO NEGATIVE footing.

The EURO has suffered once again today, as fears increase that Greece may be gearing itself up for a disorderly exit from the eurozone. The Bank of England’s Governor, Mervyn King, did not help matters, when he twisted the knife into the beleaguered region when he observed earlier today that it was ‘tearing itself apart’. The current GBP EUR exchange rate stands at 1.2512 and it is anticipated that the euro will trade with a NEGATIVE bias for some time to come.

Institutional investors are starting to come out in favour of the US DOLLAR, as fears grow over the future of Greece’s perilous finances. It appears that, when push comes to shove, the Greenback is still the world’s first choice safe haven currency. With share markets extending their recent losses on the day, the Dollar is expected to trade on a NEUTRAL TO POSITIVE footing moving forward. The current GBP USD exchange rate is 1.5936.

The AUSTRALIAN DOLLAR has taken a hammering in the currency markets in recent sessions, as investors scale back their exposure to risk in anticipation of a possible ‘hard default’ by Greece. With further interest rate cuts expected from the Reserve Bank of Australia as the year progresses, the future prospects for the Aussie are NEGATIVE. The GBP AUD exchange rate is 1.6027.

Pound Euro Exchange Rate Spirals As Greece Heads For Second General Election

Tim Boyer — Wed, 16 May 2012 09:00:00 +0100

Yesterday morning’s European session offered a timely reminder of why a significant proportion of the global investment community are still willing to hold euro-denominated assets, when the region’s leading economic power, Germany, released its latest GDP growth data. The figures revealed that German economic activity had expanded by an impressive 0.5% in the first three months of this year – well ahead of expectations of a slight increase in GDP of only 0.1% in this period. With historically high levels of domestic employment and a miniscule national debt in comparison to that of other neighbouring states, Germany continues to provide the economic model to which other nations aspire. The corresponding whole-of-eurozone Q1 GDP data, released a little later yesterday morning, also confounded expectations to show at 0.0% - analysts had been anticipating that the numbers would reveal another quarterly contraction in the region’s economy.

However, the positive sheen surrounding the euro did not last long. The afternoon session was undoubtedly a negative one for the single currency – news from Greece saw to that. The Hellenic state announced that it would be paying down €435m worth of its national debt yesterday, reminding the markets of what a parlous state its finances are in, given that €6.2bn of debt is still being held by financial institutions which refused to take part in the country’s much-vaunted debt swap earlier this year. The news from Greece got worse later yesterday, when a last-ditch effort by the country’s political parties to form a government ended in failure, meaning that another general election next month is now a near-certainty. Several weeks of political positioning and opinion poll analysis are now expected, with the euro likely to lurch lower if at any stage it appears likely that the winning party or ruling coalition will be ‘anti-bailout’.

The European session ended with a seemingly ominous piece of news, when it was announced that the plane taking newly sworn-in French President Francois Hollande for a meeting with Angela Merkel had to abort its flight to Berlin and return to Paris because it had been struck by lightning. Even the Gods appear to be conspiring against the euro, and it could get a whole lot worse before it gets better……

Exchange Rate Predictions For The Pound Sterling, Euro, US Dollar and Hong Kong Dollar

John Cameron — Tue, 15 May 2012 18:00:00 +0100

The POUND STERLING has hit the headlines for all the wrong reasons today. By the middle part of this afternoon’s European session, Sterling was the worst-performing of all of the sixteen most-actively traded currencies, thanks to this morning’s weak UK trade balance data. The Pound is expected to trade on a NEUTRAL TO NEGATIVE footing moving forward.

The EURO received a much-needed fillip on the day with the release of German GDP growth data which significantly bettered expectations. This took the GBP EUR exchange rate back down through the 1.2500 level briefly, but the pair recovered to trade to 1.2543 by the European equities market close. If tomorrow’s eurozone CPI inflation numbers outstrip expectations, then the euro could head towards the weekend trading with a NEUTRAL bias.

The US DOLLAR has registered healthy gains against the Pound and the euro today as global investors continued to shift their funds out of riskier assets and into safe havens. This afternoon’s key US retail sales and CPI inflation numbers came in as per expectations, so the main factor affecting Dollar levels in the near-term continues to be Greece’s ongoing debt woes. The current GBP USD exchange rate stands at 1.6040 and the Greenback is expected to trade on a NEUTRAL TO POSITIVE footing moving forward.

The HONG KONG DOLLAR has benefitted from its loose peg with the US Dollar in recent sessions, as investors seek out the safest of safe havens in anticipation of stormy times ahead for the global economy. The good news for the HKD is that China is continuing with measures to make its currency, the Yuan, more readily convertible. The current GBP HKD exchange rate stands at 12.4460 and Hong Kong’s currency is expected to trade on a NEUTRAL TO POSITIVE footing in the near-term.

Pound Euro Exchange Rate Breaches 1.2500 For First Time Since 2008 As Greek Debt Fears Heighten

David Woodsmith — Tue, 15 May 2012 09:00:00 +0100

The ongoing soap opera which is the Greek debt crisis took several twists and turns during yesterday’s session in the markets. The most significant development on the day came in the form of an announcement from the leaders of the ‘socialist light’ Democratic Left party which revealed that they would not enter into any coalition government which did not include the hard-line anti-bailout Syriza bloc. Ultimately, the decision by ‘Democratic Left’ makes the formation of a coalition government before Thursday’s Greek state opening of parliament highly unlikely, as the two parties which traditionally enjoy the largest popular support, PASOK and New Democracy remain fervently ‘pro-bailout’ and will not consider Syriza as a potential coalition partner.

The upshot is that Greece is likely to hold another general election next month, with Syriza and the ‘Democratic Left’ standing on an unofficial ‘anti-bailout’ ticket. There is a strong possibility that this may sweep them to victory, triggering a debt default by Greece. Yesterday’s movement in global equities markets showed a ‘pricing-in’ of this outcome, with shares losing ground across the board. Paris’s Cac 40 index was particularly hard-hit, losing over 2% of its value on the session. French financial sector shares dragged the Cac lower on the day, with Credit Agricole losing over 5% of its market value and Societe Generale losing a slightly lesser amount. These losses reflect the heavy exposure of France’s banks to Greek bonds, which they have hoarded over the last few years due to their seemingly attractive yields. This is an action they may well come to regret as the year progresses.

The developments in Europe saw the Pound enjoy a rare day as the best-performing major currency in the markets, as institutional investors shifted their funds out of euro-denominated assets and into the relative safety of Sterling. This pushed the GBP EUR exchange rate through the psychologically key 1.2500 level for the first time since the autumn of 2008. The fervently ‘risk-off’ trading environment saw the AUD, NZD and ZAR suffer sustained losses on the day.

Currency Exchange Rate Forecasts For The Euro, Pound Sterling, US Dollar and Turkish Lira For Today

James Fuller — Mon, 14 May 2012 18:00:00 +0100

The EURO has been downsold once again in the markets today. Market participants have shunned the single currency thanks to concerns over rising Spanish bond yields and ongoing uncertainty regarding the future make-up of Greece’s government. This has taken the GBP EUR exchange rate as high as 1.2555 on the day. The euro is expected to trade on a NEGATIVE footing moving forward.

The POUND STERLING has hoovered up support during the day, making it the best-performing of the major currencies. It seems that the low-yielding Pound is being used as a safe haven destination for investors shifting funds out of the beleaguered eurozone. Sterling is predicted to trade with a NEUTRAL TO POSITIVE bias ahead of tomorrow’s UK trade figures, which are expected to be bad. If they come out worse than expected, then the Pound’s bull-run may come to an abrupt end.

The US DOLLAR has put up a steady showing on the day, benefitting from a generally ‘risk-off’ trading environment which has taken global equities indices sharply lower. With global banking sector shares suffering pronounced losses in anticipation of the effects of a disorderly Greek default, the Greenback is expected to trade with a NEUTRAL TO POSITIVE footing moving forward. The current GBP USD exchange rate sits at 1.6119.

The TURKISH LIRA has performed meekly in the currency markets over the past two weeks thanks to the double threat of increased risk aversion and worries about the fiscal well-being of Turkey’s major trading partner, the eurozone. This has taken the GBP TRY exchange rate to 2.9195 on the day and given its current problems, the risk-sensitive Lira is expected to trade with a NEGATIVE bias in the near-term.

Pound Australian Dollar and Pound New Zealand Dollar Rates Could Dip As China Loosens Monetary Policy

John Cameron — Mon, 14 May 2012 09:00:00 +0100

Friday’s Asian session saw the release of data which provided further evidence that the Chinese economy is expanding at a slower pace. The annualised Industrial Production figure registered at 9.3%, versus an anticipated 12.2%. This showing was the lowest level that Chinese industrial output had expended by for some three years. Chinese Retail Sales numbers, also released on Friday printed at a year-on-year 14.7%, down from the previous month’s 14.8%. Analysts had been expecting a slight increase to 14.9%.

Initially, the poor Chinese numbers hit the high-yielding and commodity-driven currencies hard, sending the AUD, NZD, ZAR and CAD lower in the early part of Friday’s European session. Support for the Canadian Dollar flooded back into the market during the last afternoon session of the week with the release of Canadian employment figures which battered expectations, showing that a net total of 58,200 new jobs had been created in the domestic economy last month.

However, the Australian and New Zealand Dollars and the Rand did not have any supportive data to help soften the blow before Friday’s market close.

The weekend shut-down did see a major announcement from the Chinese Central Bank which is likely to provide assistance to the AUD, NAD, ZAR and CAD as this week’s session gets underway. The People’s Bank of China revealed that it is set to reduce the amount of liquid assets the country’s retail banks will have to keep on deposit from 20.5% to 20.0% of their total liabilities. This is the third time since last November that China has loosened its monetary policy, suggesting that policy-makers are willing to relax their stance on price rises in an effort to increase levels of growth. This is music to the ears of risk-sensitive currencies and those economies which depend on global exports for their future well-being.

Today’s Currency Exchange Rate Predictions For The Euro, Pound Sterling, US Dollar and Arab Emirates Dirham

Ben Hughes — Fri, 11 May 2012 18:00:00 +0100

The European Commission announced earlier today that it expects the eurozone economy to shrink by 0.3% this year, heaping the pressure on the troubled EURO. However, the Spanish government’s announcement that it will be making additional funds available to bolster the liquidity of the debt-burdened state’s retail banks has helped stem the losses for the single currency, which is expected to trade on a NEUTRAL TO NEGATIVE footing in the near-term.

UK Producer Price Index data came out slightly higher than had been anticipated this morning, suggesting that the Bank of England is continuing to struggle to suppress domestic inflation. This suggests that the BoE will not be in a position to extend its QE scheme for the foreseeable future, a fact which is supportive for the POUND STERLING. The British tender is expected to trade with a NEUTRAL bias moving forward.

For once, the US DOLLAR has basked in the reflected glory of some strong Canadian data released this afternoon. The positive Canadian unemployment data battered expectations, providing evidence that the North American economy continues to outperform its European counterpart. The current GBP USD exchange rate stands at 1.6080 and the Greenback is expected to trade on a NEUTRAL TO POSITIVE footing as we head towards the weekend close.

The ARAB EMIRATES DIRHAM remains directly pegged to the US Dollar, so any relative strength, or weakness, in the USD is directly mirrored in Dirham movements. This has seen the AED make a comeback in the currency markets over the past ten days as institutional investors fret about the future of the euro. Weak US employment figures released a week ago have triggered further safe-haven movement, benefitting the AED. The current GBP AED exchange rate stands at 5.9065 and the Dirham is expected to trade with a NEUTRAL TO POSITIVE bias moving forward.

Pound Euro Exchange Rate Could Head Higher Following Bank of England Decision to Keep QE On Hold

Minesh Chaudhari — Fri, 11 May 2012 09:00:00 +0100

Sterling received a significant boost in the middle part of yesterday’s session, as the Bank of England announced that it would not be altering the UK’s monetary policy. The gains which followed the statement suggested that a significant proportion of market participants had been factoring-in an extension to the Bank’s existing £325bn Quantitative Easing scheme. The factor which tipped the balance against an increase to the programme may well have been the most recent UK CPI inflation figures which suggested that British price rises are on increasing at an accelerated pace once again. It has been widely acknowledged that the Bank’s asset purchase scheme has been a key contributor to domestic price inflation, which has persistently remained above the government’s target of 2.0%.

There was further good news for the Pound in the latter part of yesterday’s European session, with the release of the latest NIESR UK GDP estimate, which predicted that the British economy has returned to growth in the last three months. The closely-watched figure showed a slight increase of 0.1% over the period in question, suggesting that the UK economy’s return to recession in the first quarter of 2012 will prove short-lived.

Looking ahead to today’s session, this morning’s EC forecast for economic growth in the eurozone is likely to have a strong bearing on the prospects of the single currency for the remainder of the week’s session. Recent economic indicators from the region have hinted that stringent austerity measures in several European states are starting to affect the economic well-being of the whole of Europe. If the EC does slash its growth forecasts, then expect the euro to dramatically weaken, taking the GBP EUR exchange rate higher again, following yesterday’s break towards the key psychological 1.2500 level.

Daily Exchange Rate Forecasts For The Pound Sterling, Euro, US Dollar and Singapore Dollar

David Woodsmith — Thu, 10 May 2012 18:00:00 +0100

The POUND STERLING has experienced a wave of support in the currency markets this afternoon following the Bank of England’s lunchtime announcement that it will be keeping British interest rates on hold and will not be extending the £325bn already allocated to it QE scheme. Better than anticipated UK Industrial Production and Manufacturing Production figures this morning also helped the Pound, meaning that the UK currency heads into tomorrow’s session on a POSITIVE footing.

The EURO performed steadily on the day, in spite of an announcement from the Bank of France that it expected to see a 0% national growth in the first half of 2012. If tomorrow’s German inflation data comes in below expectations, then there may be increased talk of an ECB rate cut. In the meantime, the single currency is expected to trade with a NEUTRAL TO NEGATIVE bias. The current GBP EUR exchange rate is 1.2468.

The US DOLLAR has lost a little ground against both the Pound and the Euro during today’s session. Investors have scaled back on their positions of safety during the day thanks to better-than-anticipated Australian unemployment data and a failure of Greece’s far-left Syriza bloc to form a new anti-bailout government in the troubled Hellenic state. The current GBP USD exchange rate stands at 1.6162 and the Greenback is expected to trade on a NEUTRAL TO NEGATIVE footing in the near-term.

The risk-sensitive SINGAPORE DOLLAR has sunk to its lowest level this year against the Pound, taking the GBP SGD exchange rate all the way up to 2.0242 on the day. Political instability in the eurozone has caused investors to shy away from holding assets which are perceived to carry a higher risk tariff, taking the SGD lower. The losses would surely have been greater had it not been for a strong showing for last night’s Australian jobs numbers, so the Singie is expected to trade with a NEAUTRAL TO NEGATIVE bias moving forward.

Pound US Dollar Exchange Rate Recovers Slightly As Greek Anti-Bail-Out Power Bid Fails

Toni Johnson — Thu, 10 May 2012 09:00:00 +0100

Yesterday’s afternoon session brought a rare piece of good news for the euro when Alexis Tsipras, the leader of Greece’s extreme left wing Syriza bloc, admitted defeat in his attempt to forge an anti-bail-out coalition government. Tsipras stated that his ‘dream of a left-wing government’ would not be coming to fruition, as talks with the Communist KKE and the Democratic Left broke down. Erstwhile ruling party, Pasok will now be given a chance to attempt to form a ruling alliance, but given the party’s dismal showing in last weekend’s general election, it seems unlikely that potential partners will feel that the ailing party has a mandate to govern.

The most likely dénouement to the current power vacuum in the troubled Hellenic state now appears to be another general election next month. The markets abhor uncertainty, so this is far from good news for the single currency. However, its much better than the alternative, if the alternative is a coalition government which fails to keep to the terms of the country’s bail-out package, triggering a disorderly default.

Meanwhile, yesterday also saw the stakes being heightened in Greece, when it was announced that the European Financial Stability Facility would be withholding the next €1bn of the nation’s emergency bail-out funding, pending the formation of a new government. This served to emphasise to participants in the Greek political process that any government which came into being on an ‘anti-bail-out’ ticket would be plunging its nation into further economic turmoil.

The news that a Greek anti-bail-out government will not be taking up the reins of power, in the very near-term at least, caused a slight uptick in risk sentiment in the middle part of yesterday’s North American session, sending the GBP USD exchange rate up to above 1.6150 once more. However, Chinese data released in the early hours of this morning, which revealed significantly lower imports and exports last month, suggesting a downturn in economic activity. This has taken the edge off risk appetite once more, causing the safe-haven Dollar to garner renewed support, causing the GBP USD exchange rate to dip to 1.6123 overnight. Further downside is likely for the pair in the near-term if the situation in Greece takes a turn for the worse.

Daily Exchange Rate Predictions For The Euro, Pound Sterling, US Dollar and Indian Rupee

John Cameron — Wed, 09 May 2012 18:00:00 +0100

The EURO has experienced renewed downside pressure during this afternoon’s European session, following comments from Spanish Prime Minister Mariano Rajoy which suggested that he thinks that there is a strong possibility that Greece will leave the euro. Rajoy’s words took the GBP EUR exchange rate to 1.2462 and the single currency is expected to continue trading on a NEGATIVE footing moving forward.

The POUND STERLING has had a decent day on the currency markets, in spite of the release of highly disappointing April shop sales figures from the British Retail Consortium earlier today. All bets are now off for Sterling ahead of tomorrow lunchtime’s Bank of England monetary policy decision. An increase to the Bank’s QE scheme is not out of the question due to weak recent UK growth numbers and signs that the global economic recovery is stalling. In the meantime, the Pound is expected to trade with a NEUTRAL TO POSITIVE bias.

The US DOLLAR has been the big winner on the day, hoovering up safe haven support as fears grow that a Greek debt default might be just around the corner. This has seen the GBP USD exchange rate dip to 1.6067 on the day. Whilst Greece’s socialist Syriza bloc continues to conduct talks to form an ‘anti-bailout’ coalition government, the Dollar is expected to trade on a NEUTRAL TO POSITIVE footing.

The INDIAN RUPEE continues to experience pronounced downside in the currency markets. The first two sessions of this week have seen foreign investors sell-off an estimated INR10bn of domestic equities, as they tripped over themselves to shift out of riskier assets. However, market rumours suggest that the Indian government has now intervened in the market to stem losses for the Rupee. This means that the Indian currency is expected to trade with a NEUTRAL bias moving forward. The current GBP INR exchange rate stands at 86.5380.

Fear Grips Global Markets As Greek Politicians Countenance A Sovereign Debt Default

Tim Boyer — Wed, 09 May 2012 09:00:00 +0100

The precarious political situation in Greece informed price action in the currency markets during yesterday’s session, sending the value of the high-yielders and commodity currencies tumbling. Not surprisingly, the euro didn’t fare too well either.

To recap, the story so far has seen Greece build up unmanageable debts which it has no hope of servicing using its own means. This caused Greek policy makers to agree a series of bail-out packages with the EU/IMF/ECB ‘Troika’. The price that the troubled Hellenic state had to pay for accessing these emergency funds was its acquiescence to a raft of swingeing tax hikes and government spending cuts. Unsurprisingly, these measures proved vastly unpopular with the Greek electorate and at the weekend, they voiced their displeasure when 70% of votes cast in the country’s general election were in favour of ‘anti-bailout’ parties. The centre-right, pro bail-out New Democracy party garnered the largest share of the segmented popular vote, at a mere 18.85%. However, the party’s leader Antonis Samaras quickly declared his inability to form a coalition government.

This has allowed the left wing Syriza bloc, who secured the second largest share of the vote, to step in in an attempt to forge a ‘coalition of the unwilling’ – unwilling, that is, to accept the terms of the Troika’s ongoing bail-out funding. Without this funding, Greece will be unable to meet its next round of debt commitments, triggering a disorderly sovereign default, which will plunge the financial markets into a new darker, deeper abyss than the credit crisis of 2007. Alexis Tsipras, the leader of the Syriza bloc added fuel to the flames yesterday by stating his intention to ‘tear up’ the terms of Greece’s EU/IMF/ECB bail-out.

The developments in Greece caused fear to take a hold in the markets once again, triggering sustained losses in equity markets, while the Australian, New Zealand and Canadian Dollars suffered pronounced losses as investors priced-in the massive negative effect on global growth that a ‘hard default’ by Greece would surely precipitate.

Currency Exchange Rate Forecasts For The Euro, US Dollar, Pound Sterling and South African Rand For Today

John Cameron — Tue, 08 May 2012 18:00:00 +0100

The EURO remains out of favour in the currency markets, as investors factor-in the real and present possibility that Greece will go down the anti-bailout route, precipitating a chaotic default. German Industrial Production data, released earlier, thrashed expectations, confirming the strength of the eurozone’s major player. The GBP EUR exchange rate stands at 1.2407 and the single currency is expected to trade on a NEGATIVE footing moving forward.

The POUND STERLING has spent the day blowing in the wind, making gains against the risk-sensitive high yielders, but losing ground against the low-yielding safe haven tenders. This morning’s weak UK housing market numbers once again made little difference, however Thursday’s Bank of England monetary policy decision could be game-changing if the nine-man committee votes for an increase to QE. In the meantime, the Pound is expected to trade with a NEUTRAL bias.

The US DOLLAR has outperformed almost all of the other major currencies on the day, as institutional investors sought out the safest of safe havens in order to shelter their funds from a potential disorderly default in Greece. Last Friday’s weak US labour market numbers have caused a further move into US t-bills, meaning that the Greenback heads into tomorrow on a NEUTRAL TO POSITIVE footing. The current GBP USD exchange rate is 1.6129.

The SOUTH AFRICAN RAND has incurred steady losses since the middle part of March, taking the GBP ZAR exchange rate as high as 12.7527 on the day. Losses for the South African currency have coincided with a wobble in global risk appetite as investors factor-in an apparent softening of global economic data and the possibility of a messy Greek debt default. The Rand is expected to trade on a NEUTRAL TO NEGATIVE footing moving forward.

Sterling Euro Exchange Rate Spirals To 42-Month High As Anti-Austerity Parties Make Gains In Greek Elections And France Elects Pro-Growth President

James Fuller — Tue, 08 May 2012 09:00:00 +0100

Political upheaval in mainland Europe has had a dramatic effect on the currency markets since they re-opened on Sunday night. The French people voted in favour of Francois Hollande to be their new head of state on Sunday, leaving the country’s erstwhile President Nicolas Sarkozy adrift in the political wilderness. The Socialist candidate Hollande was elected on a firmly ‘pro-growth’ ticket and early indications are that he will struggle to reconcile this with German leader Angela Merkel’s ‘sound money’ solution to the eurozone’s debt crisis, which has up to this point been so positively received by the markets.

Concerns about Euroland’s future fiscal prospects were exacerbated by a tame showing for the two major political parties, Pasok and New Democracy, in Greece’s general election, also held over the weekend. Between them, the two parties earned less than one in three votes, leaving minor ‘anti-austerity’ parties to make massive gains. A protracted period of political horse-trading is now expected in Greece, as Antonis Samaras, the leader of the New Democracy party, attempts to forge a coalition in order to move the debt-addled country forward. The longer this takes, the greater the pressure will be on the euro, as speculation will mount regarding the Hellenic state’s future.

The weekend turmoil in Europe caused a shift out of euro-denominated assets, causing the GBP EUR exchange rate to spiral to 1.2445 soon after trading re-opened on Sunday night. This was the pair’s highest level since November 2008.

Elsewhere, the ‘risk off’ trading environment which Friday afternoon’s weaker than anticipated US Non-Farm Payroll numbers for April triggered has prevailed during the early part of this week’s session. This has taken global stock indices lower, and heaped pressure on the already out-of-favour Aussie and Kiwi Dollars. It appears unlikely that the mood of risk aversion is going recede in a hurry, meaning that the AUD NZD and ZAR could experience further selling pressure as the week progresses.

Currency Rate Predictions For The Pound Sterling, Euro, US Dollar and Norwegian Krone For Today

David Woodsmith — Fri, 04 May 2012 14:00:00 +0100

Weak UK House Price data in the form of the latest Halifax survey, barely affected levels on the POUND STERLING on the day. However, figures showing that sales of new cars in Britain showed an annualised increase of 3.3% last month, provided a chink of hope, meaning that Sterling heads for the weekend close on a NEUTRAL TO POSITIVE footing.

This morning’s whole-of-eurozone Composite PMI survey sent out ominous signs regarding the future prospects for the EURO. The data revealed that the eurozone’s private sector is contracting at a far faster rate than had previously been thought. This took the GBP EUR exchange rate to 1.2328 by the middle part of today’s European session, and the single currency is expected to trade with a NEUTRAL TO NEGATIVE bias moving forward.

The US DOLLAR has experienced its usual volatility around the release of this afternoon’s key Non-Farm Payroll figure. The number showed that only 130,000 new jobs had been created last month in the US economy, well below expectations of a 165,000 showing. This has added to the feeling amongst the investment community that activity is cooling in America’s giant economy. This could see investors factor-in a higher likelihood of QE3 from the Federal Reserve later this year, which will in turn see the Greenback trade on a NEUTRAL TO NEGATIVE footing in the short term. The GBP USD exchange rate stands at 1.6169.

The NORWEGIAN KRONE has steadily weakened against Sterling over the past two months, taking the GBP NOK exchange rate to its current level of 9.3240. The Norwegian currency has faltered in the markets thanks to growing concerns over the sovereign debt situation in its major trading partner, the eurozone, and by mounting evidence that the rate of economic growth is slowing in China, the US and the UK. This means that the NOK currently trades with a NEGATIVE bias.

Sterling Euro Rate Dips As ECB Talks Down Interest Rate Cut

Ben Hughes — Fri, 04 May 2012 09:00:00 +0100

As ever, the future direction of interest rates was never far from the minds of currency market participants during yesterday’s session.

European Central Bank President Mario Draghi’s press conference, which followed the ECB’s announcement that it is maintaining its key lending rate at 1.00%, was generally judged to have been supportive for the euro. The primary headline-grabber from Draghi came when he announced that the Bank’s policy committee had not discussed trimming interest rates. Draghi also observed that the region had made good ‘fiscal progress’, suggesting that he is happy that the collective medicine which the eurozone’s more debt-challenged states have taken in recent months, is beginning to have the desired effect. However, the taste which it has left in the mouth of European workers remains far from pleasant, as Wednesday’s eurozone employment figures testified.

Meanwhile, investors holding Sterling-denominated assets were also forced to amend their interest rate expectations following yesterday morning’s troubling UK PMI Services sector survey for last month, which showed a surprise cooling in activity levels in this key area of the British economy in comparison with the month before. The Services numbers hint that the unexpected upward blip for UK inflation last month was an ‘outlier’ and that the rate of British price rises may ease over the remainder of 2012.

Elsewhere, market whispers suggested that the Reserve Bank of New Zealand may be set to trim its domestic interest rates from their current level of 2.5%, at which it has stood since March of last year. The rumours follow unexpectedly weak New Zealand labour market data, released during Thursday’s Asian session, which showed that joblessness in the Pacific state had risen from 6.3% in Q4 2011, to 6.7% in the first three months of this year. This saw the GBP NZD exchange rate to 2.0224, its highest level since before Christmas.

Currency Exchange Rate Forecasts For The US Dollar, Pound Sterling, Euro and Canadian Dollar For Today

John Cameron — Thu, 03 May 2012 18:00:00 +0100

More weak UK house price data this morning had a limited effect on the POUND STERLING – investors have almost totally priced-in the ongoing poor performance of the UK’s housing market. However, a disappointing showing for this morning’s PMI Services survey came as more of a shock, meaning that Sterling heads towards the weekend on a NEUTRAL TO NEGATIVE footing.

The EURO has clawed back a small portion of the ground which it has lost in recent sessions against the Pound and the Dollar today. The GBP EUR exchange rate sits at 1.2287 right now. Relief at Spain’s success in selling a full allocation of its bonds at auction earlier was tempered by disappointment regarding the interest rates which the troubled Iberian state was forced to pay. The ECB’s decision to keep its key lending rate on hold has provided further support for the single currency, meaning that the euro trades with a NEUTRAL bias moving forward.

A generally encouraging performance from global stocks on the day has provided a headwind for the US DOLLAR. However, with Spanish debt yields edging higher once again, there remains the potential for the Buck to strengthen at any given time. Investors are sitting on their hands ahead of tomorrow’s key US Non-Farm Payrolls data release, so the Greenback is anticipated to trade on a NEUTRAL footing in the near-term. The current GBP USD exchange rate stands at 1.6180.

The CANADIAN DOLLAR has drifted lower against most of the other sixteen most-actively traded currencies on the day, following a strong performance in the markets since Tuesday afternoon, which was elicited by a highly encouraging US manufacturing sector data. The move emphasises the extent to which the Canadian currency is dependent on economic activity in the US, making tomorrow afternoon’s US Non-Farm Payrolls figure key. The CAD is expected to trade with a NEUTRAL TO NEGATIVE bias in the meantime and the GBP CAD rate stands at 1.5941.

Pound Euro Exchange Rate Strikes 22-Month High As Eurozone Unemployment Hits Record High

James Fuller — Thu, 03 May 2012 09:00:00 +0100

The evidence is mounting that the eurozone’s sovereign debt problems are starting to have a pronounced adverse effect on the continental European economy. A slew of disappointing European data releases yesterday morning added to this feeling, as firstly German unemployment figures and then last month’s whole-of-eurozone PMI Manufacturing sector survey came out significantly worse than had been expected.

However, the killer blow came with the release of March’s eurozone unemployment figures during the middle part of the European morning session; the key labour market release showed that joblessness in the region had rocketed to 10.9%, its highest level since records began. It appears that widespread government spending cuts and tax hikes in an attempt to balance the collective books of debt-addled eurozone states are causing European consumers to stop spending, hitting Europe’s economy hard. This saw the GBP EUR exchange rate to trade up to 1.2327, its highest level for over 22 months.

Elsewhere, there was further cause for optimism for the US real economy, as US Factory Order data for March came in at a better than expected -1.5%. However, all was not rosy in the States, as the ADP Employment Change number for last month printed at 119,000 versus expectations of 170,000. This figure often provides a relatively accurate ‘heads up’ on the key US Non-Farm Payroll figure. This month’s NFP edition is set for release on Friday, and if it does indeed show that less than the anticipated 165,000 new jobs were created in the non-farming sectors of the US economy last month, then the Greenback could come in for sustained safe-haven support in the lead-up to this week’s market close at 2200hrs BST on Friday.

Daily Exchange Rate Predictions For The Euro, US Dollar, Pound Sterling and New Zealand Dollar

Ben Hughes — Wed, 02 May 2012 18:00:00 +0100

The EURO has remained firmly out of favour in the markets today, as data revealed that unemployment in the eurozone had hit its highest ever level. The saw the GBP EUR exchange rate spiral to 1.2326. The news that leading credit ratings agency S&P had upgraded Greece’s debt from its current junk status did little to convince investors to hold the single currency, which currently trades on a NEUTRAL TO NEGATIVE footing.

The US DOLLAR has gained ground against the majority of the other majors during today’s session, as the Dow Jones equities market edged off yesterday’s four-year high due to profit-taking from speculators. The Greenback is expected to trade with a NEUTRAL TO POSITIVE bias until Friday’s key US Non-Farm Payrolls data is released. The current GBP USD exchange rate is 1.6197.

The POUND STERLING has put in a neutral showing in the markets on the day. Strong showings for this morning’s UK Mortgage Approval and PMI Construction data were offset by the gnawing ever-present knowledge that the British economy has returned to recession. Sterling is expected to trade with a NEUTRAL bias in the near-term.

The NEW ZEALAND DOLLAR has suffered on the currency markets today, taking the GBP NZD exchange rate as high as 2.0013. Yesterday’s data which revealed that NZ Commodities Prices had slumped to their lowest level for a year and a half, suggesting that the Kiwi economy is started to feel a backlash from the global economic slowdown. Tonight’s NZ employment data will be closely-watched for confirmation of this. In the meantime, the NZD trades on a NEGATIVE footing in the near-term.

Encouraging US Manufacturing Data Could weaken The US Dollar

Minesh Chaudhari — Wed, 02 May 2012 09:00:00 +0100

After recent data releases, which have point to a pronounced cooling in the rate of economic activity in China, yesterday’s Asian session saw the release of figures which provided some cause for renewed optimism. The Chinese PMI Manufacturing Survey for April registered an expansion in this key sector of the giant Asian economy, for the fifth month in succession.

However, the Chinese data caused only a marginal uptick in global risk sentiment during the European trading session. This meant that the safe-haven US Dollar continued to hold strong against the other majors. However, the Greenback’s resilience was tested by the release of April’s ISM Manufacturing survey yesterday afternoon. The key indicator of American manufacturing activity registered at a healthy 54.8, far above expectations of a 53.0 reading. April’s counterpart figure produced a reading of 53.4, indicating that manufacturing output is on an upward trajectory. The development saw North American equities markets move forward. Ceteris paribus, this should see the Dollar weaken in the near-term, as institutional investors move out of their positions of safety in order to get involved in more rewarding plays.

Today’s session sees the release of whole-of-eurozone employment data for March. Analysts expect the figure to show an increase in the overall level of unemployment in the region from 10.8% in February to 10.9%. If this comes to pass, then fears over the health of the real economy in Europe are likely to increase, piling further pressure on the beleaguered euro and eliciting safe-haven support for the US Dollar and Swiss Franc.

Daily Currency Rate Forecasts For The US Dollar, Pound Sterling, Euro and Swiss Franc

James Fuller — Tue, 01 May 2012 18:00:00 +0100

The POUND STERLING has put in a meek showing in the currency markets today, following the release of a disappointing PMI Manufacturing survey for April, which came in below expectations. If tonight’s Halifax House Price survey confirms that that this key sector of the UK economy remains in the doldrums, then Sterling could come under further selling pressure. In the meantime, the Pound is expected to trade on a NEUTRAL TO NEGATIVE footing.

Ongoing political uncertainty in France has suppressed the EURO on the day, as investors price-in the possibility that Nicolas Sarkozy will no longer be the country’s President by the start of next week. This has taken the GBP EUR exchange rate to its current level of 1.2253. If tomorrow morning’s German unemployment data confirms that the eurozone’s premier economic power is creaking under the pressure of supporting debt-laden peripheral states, then the second half of the week could bring more pain for the single currency. In the meantime, the euro trades with a NEUTRAL TO NEGATIVE bias.

The US DOLLAR has put in another relatively strong performance on the day, sending the GBP USD exchange rate down to 1.6193. The Reserve Bank of Australia’s gloomy assessment of the prospects for the continuance of the global economic recovery, have caused the Greenback to hoover up safe haven support, however a strong ISM Manufacturing figure, released in the states this afternoon, has the potential to reverse the situation, meaning that the Dollar trades on a NEUTRAL footing in the near-term.

The SWISS FRANC has had a steady day, following its pronounced losses of the last two weeks. With stock markets trading sideways over the past couple of sessions and fears over the eurozone’s ongoing debt crisis never far from investors’ minds, the Franc has the potential to strengthen from here, meaning that it trades with a NEUTRAL TO NEGATIVE bias moving forward.

Pound Dollar Exchange Rate Eases As Global Economic Data Disappoints

David Woodsmith — Tue, 01 May 2012 09:00:00 +0100

The Dollar and the Yen were the major winners in the currency markets during yesterday’s session and that means one thing – the return of risk aversion.

The shift out of risk was driven by the release of a slew of disappointing data releases from disparate and far-reaching corners of the global economy. The week had opened with weaker-than-anticipated New Zealand Trade Balance numbers for March. Analysts had been expecting a positive print of NZD417m, so there was widespread disappointment when the figure came out at less than a third of this number. This is particularly bad news for the New Zealand economy due to its heavy dependence on demand for the export of its raw materials.

Things got worse as the European session got underway, with the release of Spanish government data which confirmed that the troubled Iberian economy had followed the UK’s lead of last week by slipping back into recession. It was scant solace that the quarterly GDP figure was slightly less bad than had been anticipated, registering at -0.3% versus expectations of a decrease in activity of 0.4%.

The mood of gloom prevailed into yesterday afternoon’s session with the release of Canadian growth figures for February. Again, these numbers surprised analysts by falling considerably short of their anticipated level, suggesting that activity in the Canadian economy is cooling due to a decrease in global demand thanks to widespread European austerity measures and a tightening of Chinese monetary policy.

The flight to quality on the day saw the Greenback well-supported, taking the GBP USD exchange rate down from its 8-month high of 1.6302, which it reached at the start of European trading to pull back into the low 1.6200s by the middle part of the North American session. If this afternoon's US Manufacturing sector figures disappoint, then there could be further downside to come for the GBP USD exchange rate.

Today’s Exchange Rate Predictions for the Euro, Pound Sterling, US Dollar and Japanese Yen

John Cameron — Mon, 30 Apr 2012 18:00:00 +0100

The EURO has enjoyed a steady day, which is good news following the heavy losses which it has incurred at times during the last few weeks. The single currency has been supported by Spanish GDP data, released this morning, which revealed that the troubled Iberian economy contracted by a smaller amount than had been anticipated in Q1. The current GBP EUR exchange rate stands at 1.2280 and the euro is expected to trade on a NEUTRAL footing ahead of Wednesday’s German unemployment data.

Today has seen relatively little price action for the POUND STERLING against the other majors, with Sterling losing a little ground against the safe-haven currencies and gaining slightly against the high yield / high risk currencies. Tomorrow morning’s UK PMI Manufacturing sector survey has the potential to come out below expectations, following last week’s disappointing UK Q1 GDP figure. This means that the Pound trades with a NEUTRAL TO NEGATIVE bias moving forward.

The US DOLLAR has fared well on the day, outperforming almost all of the other sixteen most-actively-traded global currencies. The Greenback has benefitted from weaker than expected US Personal Consumption data and disappointing Canadian GDP numbers, released this afternoon, which have served to take the edge off institutional investors’ appetite for risk. The GBP USD exchange rate stands at 1.6245 and the Dollar is expected to trade on a NEUTRAL TO POSITIVE footing in the near-term.

The JAPANESE YEN has put in a strong showing in the markets today, gaining against all of the other majors. The Japanese currency has re-affirmed its status a safe haven currency, as investors turned away from risk-laden plays and sought out low-yielding options for their investments. Last Friday’s announcement of further monetary-easing measures by the Bank of Japan has elicited a renewed surge of support for the JPY. The GBP JPY exchange rate stands at 129.9350 and the Yen is expected to trade with a NEUTRAL TO POSITIVE bias over coming sessions.