Today's Latest Exchange Rate Predictions - GBP, USD, EUR, AUD, NZD, CAD

23 Mar 2011 at 4 PM - Written by John Cameron

STORY LINK Today's Latest Exchange Rate Predictions - GBP, USD, EUR, AUD, NZD, CAD

POUND STERLING
The highlight of today’s UK Budget Statement turned out to be a low light, when Chancellor George Osborne announced that government forecasts for 2011 GDP growth was down-graded form 2.1% to 1.7%. The Pound lost ground this morning when the latest Bank of England MPC Minutes revealed that only three of the nine man committee had voted for a rate hike. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6254
The Dollar enjoyed its best session for several days, gaining over half a percentage point against both Sterling and the Euro as global stock markets struggled to break higher. Partly these Dollar gains were technical, with speculators taking profits following yesterday’s top-of-the-range rates. Partly it was a reaction to some extremely poor New Home Sales Data in the States, which caused a dip in appetite for risk. NEAR-TERM OUTLOOK – NEUTRAL.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1504

Support has ebbed away from the Euro during today’s session as fears of an impending Eurozone Sovereign Debt crisis have re-emerged. Portuguese legislators are struggling to pass austerity measures which would shore-up Portugal’s finances. A failure to pass these laws could see further downside for the Euro. This afternoon’s consumer confidence survey came out slightly worse than expected, placing further selling pressure on the Euro. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6053

The Australian Dollar made significant gains on the day as market participants adjusted their interest rate expectations for the Australian economy. Futures markets are now pricing in a 13% chance of a rate cut by the Reserve Bank of Australia at their 5th April meeting. Last week, the same futures markets were pricing in a 35% chance. Some analysts have suggested that a rate hike might be possible as Australia feels the economic effects of the Japanese earthquake. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.1932

The New Zealand Dollar gained ground in the markets today, following last night’s domestic current account figures. These numbers showed that the current account deficit/GDP ratio is at its smallest for a decade. This gave investors encouragement that New Zealand’s economy may be able to trade its way out of its recent dip. NEAR-TERM OUTLOOK – NEUTRAL.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5931

The prospect of the third Canadian national election in five years failed to weaken the CAD during today’s session, as the GBP/CAD rate dipped by 0.75%. The reason for this is likely to be the fact that Canada’s two leading political parties, the Conservatives and Liberals have very similar economic policies. With oil prices staying close to the top of their 30 month range, the Canadian Dollar could strengthen further. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVIVE.

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