Exchange Rate Outlook for Majors : GBP, USD, EUR, AUD, CAD, NZD

15 Mar 2011 at 4 PM - Written by John Cameron

STORY LINK Exchange Rate Outlook for Majors : GBP, USD, EUR, AUD, CAD, NZD

POUND STERLING

Poor housing sector has hurt the Pound today, with government figures showing that UK house prices suffered a considerable monthly drop in January. Sterling is threatening to drop down through significant market supports against the Euro and the US Dollar. Better-than-anticipated employment data tomorrow is required to stop it heading lower. NEAR-TERM OUTLOOK – NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6084

The Dollar has traded across an extremely wide range against the other majors today, as the markets factored in news emerging from Japan. Stock markets suffered heavy losses , which has lead to the Dollar to pick up support via its safe haven role. Oil prices are heading lower off their recent 30 month highs, which also benefits the Greenback. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1505

The German ZEW Index released earlier this morning provided concerns for analysts and worries over the impact the Japanese crisis will have on German industry also held the Euro back. It is possible that all of the good news for the Euro, (i.e. a probable April rate hike and beefing up of the European Bail-out fund), is now out in the open and factored in. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6209

The Aussie has suffered major losses on the currency markets during today’s session as global appetite for risk evaporated following the aftermath of the Japanese earthquake. The Australian economy has higher interest rates than almost any other developed economy, making it particularly susceptible to dips in risk sentiment. Further selling pressure is likely during coming sessions. NEAR-TERM OUTLOOK – NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5794

Oil prices have fallen away from their recent highs as the markets price-in the knock-on effects that the Japanese earthquake will have on global demand for crude. This has hurt the Canadian Dollar, which at one point today traded almost 4c lower against the Pound than yesterday’s high. If Japanese radiation fears recede, then oil may head higher as the market re-focuses on political uncertainty in Libya, Saudi Arabia and Bahrain. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.1956

The New Zealand Dollar lost some ground against the majors, but with central bank interest rates now running at 2.50%, the Kiwi is less risk-sensitive than it was a few months ago. As the clear-up operation begins in earnest after the Christchurch earthquake, this evening’s Westpac Consumer Confidence Survey for Quarter 1 will be closely watched, but is unlikely to provide much support for the Kiwi. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

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