Foreign Exchange Rates : Currency Predictions - GBP, EUR, USD, NOK, SGD, CHF

25 Feb 2011 at 4 PM - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, EUR, USD, NOK, SGD, CHF

POUND STERLING

The Pound took a hammering in the markets today as the Q4 GDP Figure was revised downwards from an initial estimate of -0.5% to -0.6%. Analysts had expected the figure to show an improvement following hints in the Bank of England MPC Minutes for February’s MPC meeting. Futures markets have downwardly revised UK interest rate predictions and a rate rise next month now looks highly unlikely. NEAR-TERM OUTLOOK - NEGATIVE.


EURO

The Euro has suffered from some drift in the markets during today’s session, losing almost 0.5% against the US Dollar. The Eurozone continues to suffer from fears over its structural stability, with the ECB yet to fully resolve its policy on sovereign debt; these concerns are accentuated by the current climate of risk aversion. Monday’s whole of Eurozone inflation figure will set the tone for next week. NEAR-TERM OUTLOOK - NEUTRAL.


US DOLLAR

This afternoon’s revised Q4 Annualised US GDP figure provided concerns about the strength of the recovery in the States, coming out at 2.8% versus expectations of 3.3%. This follows yesterday’s worse than anticipated New Home Sales figure for January. This has caused defensive plays by institutional investors shifting funds into the safe haven of the US T-Bill. Oil remains high, but it’s march forward is not at the rate of earlier this week and the S& P 500 has made gains. All in all, mixed messages for the Greenback. NEAR-TERM OUTLOOK - NEUTRAL.


NORWEGIAN KRONE

Norway is the fifth largest oil exporter in the world, so the Krone is benefiting from the recent spike in oil prices more than most currencies. Analysts are predicting a hike in Norwegian interest rates in Q2 of 2011, leading many to suggest that the Krone will pick up support through carry trades at the expense of funding currencies like the Yen and Swiss Franc as 2011 progresses. NEAR-TERM OUTLOOK - POSITIVE.


SINGAPORE DOLLAR

The Singapore currency continues to trend stronger against the US Dollar and is currently trading at 1.27 against the Greenback, having traded at close to 1.4200 in June 2010. Concerns that China might aggressively tighten monetary policy throughout 2011 remain, as continuing evidence of rising prices in China is released. This would significantly harm the Singapore Dollar. However, Finance Minister Tharman Shanmugaratnam confirmed in a speech at the end of last week that policy-makers would continue to seek to control domestic inflation by allowing the Singapore currency to appreciate. NEAR-TERM OUTLOOK - POSITIVE.


SWISS FRANC

The franc climbed to a record high against the US Dollar earlier this week as civil unrest in North Africa caused the Swiss currency to benefit from its role as a safe-haven currency. The Franc has picked up further support in recent weeks thanks to ongoing fears about the ability of several major European nations to service their sovereign debts. However, the Switzerland looks likely to maintain interest rates at low levels for the foreseeable future, cementing its position as a funding currency and leaving it susceptible to losses . NEAR-TERM OUTLOOK - NEUTRAL.

TAGS: American Dollar Forecasts Currency Predictions Euro Forecasts Norwegian Krone Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound Norwegian Krone Forecasts Pound Singapore Dollar Forecasts Pound Sterling Forecasts Pound Swiss Franc Forecasts Singapore Dollar Forecasts Swiss Franc Forecasts