Exchange Rate Predictions – GBP, USD, EUR, AUD, ZAR, SGD

4 Mar 2011 at 4 PM - Written by John Cameron

STORY LINK Exchange Rate Predictions – GBP, USD, EUR, AUD, ZAR, SGD

POUND STERLING

Sterling has suffered heavy selling pressure over the last 24 hours following yesterday’s worse-than-anticipated PMI Services Sector figure. This morning’s Halifax House Price survey for February showed a monthly contraction in the UK housing market. Meanwhile, Sterling loses ground to the Euro on relative interest rate expectations. NEAR-TERM OUTLOOK – NEGATIVE.


US DOLLAR

The Pound Dollar exchange rate (GBP/USD) is 1.6250

Global stocks continue to rebound following their recent blip, causing a move out of Dollar-denominated safe haven instruments and placing downward pressure on the USD. This afternoon’s positive employment data in the states may also cause the Dollar to lose ground as optimism regarding a recovery in the real economy in the states picks up. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO

The Pound Euro exchange rate (GBP/EUR) is 1.1635

The Euro continues to benefit from the revision to Eurozone interest rate expectations which followed ECB President Trichet’s hawkish comments yesterday. Yesterday’s Eurozone Retail Sales and growth figures came out in line with expectations. The Euro is likely to trend higher in the absence of any further data releases of significance until next week. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


AUSTRALIAN DOLLAR

The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6060

The Australian Dollar has suffered as the market adjusts its expectations regarding the future direction of global interest rates. ECB President Trichet’s comments of yesterday could signal a new rate-raising cycle for Europe and other economies, which would erode the Aussie’s relative interest rate advantage. This has meant that the equities rally of the past two sessions has failed to strengthen the Australian Dollar. NEAR-TERM OUTLOOK – NEAUTRAL TO NEAGTIVE.


SOUTH AFRICAN RAND

The Pound South African Rand exchange rate (GBP/ZAR) is 11.1990

The Rand’s improvement against the Pound since mid-February has stalled in the past three sessions, with the South African currency struggling to break below the significant 11.20 resistant level. Share markets have improved in this time but this has failed to elicit the usual Rand strength, perhaps because the Rand’s relative interest rate advantage is coming under threat. The SA government is still keen for the Rand to weaken. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


SINGAPORE DOLLAR

The Pound Singapore Dollar exchange rate (GBP/SGD) is 2.0593

The Singapore Dollar has broken to a new record high against the US Dollar today. This has been caused by expectations that policy-makers in Singapore will move to tighten the city-state’s monetary policy in the near future. The improvement in Asian equities markets is also benefitting the Singapore Dollar. NEAR-TERM OUTLOOK – POSITIVE.

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