Exchange Rate Predictions - GBP, USD, EUR, NZD, CHF, HKD

Published: Tuesday, 8 March 2011 16:36 BST - Written by John Cameron

STORY LINK Exchange Rate Predictions - GBP, USD, EUR, NZD, CHF, HKD

POUND STERLING

Poor retails sales figures released overnight caused some downside for Sterling in early trading, but the Pound recovered to trade on the level against the majority of the majors today. Many investors are delaying trades until after Thursday’s BoE Interest Rate decision. The futures markets are pricing in a 15-50% chance of a surprise 25bps UK rate hike, so downside for the Pound is possible if they hold. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR

The Pound Dollar exchange rate (GBP/USD) is 1.6156

The Dollar has picked up support throughout today’s European session as risk sentiment dipped due to continued fears over the effect of the Arab uprising and renewed fears over the Eurozone sovereign debt situation. With US fundamentals picking up, there is potential for further downside when risk aversion recedes. NEAR-TERM OUTLOOK – NEUTRAL.


EURO

The Pound Euro exchange rate (GBP/EUR) is 1.1618


Market focus has moved away from speculation on a Eurozone rate hike next month and now is now settled on European sovereign debts. German policy-makers remain reluctant to contribute the Eurozone bailout fund ahead of Friday’s ECB Emergency Debt Summit. Meanwhile, Portuguese, Greek and Irish debt spreads remain sky high. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR

The Pound New Zealand Dollar exchange rate (GBP/NZD)is 2.1831

Futures markets make it a near-certainty that the Reserve Bank of New Zealand will cut interest rates at this week’s meeting. A cut of 50bps points would be likely to further hurt the NZD, but the Kiwi has made up some ground against the majors today as speculators take profit. A feeling pervades that all of the bad news is now out in the open for the Kiwi. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


SWISS FRANC

The Pound Swiss Franc exchange rate (GBP/CHF) is 1.5098

The Swiss Franc lost ground against the majors today as the price of a barrel of crude pulled back from recent highs. The Franc lost more ground to the Dollar than any other currency as investors pulled their funds out of Europe over jitters that Friday’s Emergency ECB Debt Summit may fail to deliver a positive conclusion. NEAR-TERM OUTLOOK –NEUTRAL TO NEGATIVE.


HONG KONG DOLLAR

The Pound Hong Kong Dollar exchange rate (GBP/HKD) is 1.5855

The GBP/HKD pair has lost significant ground in the first two trading days of this week, trending down from a high of 12.72 yesterday to trade down to its current level below 12.60. The Hang Seng has made significant gains on the week, providing support for the Hong Kong Dollar. The annual meeting of China’s National People’s Congress is taking place for the remainder of the week, meaning that there are unlikely to be any major moves for the HKD. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.

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