Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD, CAD

25 Mar 2011 at 4 PM - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD, CAD

POUND STERLING

With no tier one data releases in the UK, the Pound traded in a tight range against all of the 16 most traded currencies, with the exception of the high-yielders, which continued to trend stronger against Sterling. The Pound continues to be weighed down by dovish interest rate expectations and the threat of a credit down-grading due to downwardly-revised growth forecasts. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6011

Federal Reserve Lockhart confirmed his support for a tightening of US monetary policy when he suggested that the Fed’s Quantitative Easing programme should be ended in June and USinflation needed to be ‘closely watched’. This caused the Greenback to pick up some market support, as did this afternoon’s lower-than-expected US Personal Consumption figure for quarter 4. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1380

Taken at face value, this morning’s announcement that EU Leaders have reached an agreement on the future make-up of the European Financial Stability Fund should have been supportive to the Euro. However, the final agreement is a watered-down version of the original proposal, following objections by Germany. With Portugal still grappling with ever-widening debt spreads, the agreement is unlikely to calm frayed nerves. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5613

The Australian Dollar continued to make gains against all of the majors today, with AUD/USD reaching its highest level for several years. This move has been caused by a marked increase in risk appetite as geo-political events in Libya and Japan appear to be resolving themselves. With near-neighbours New Zealand cutting interest rates by 50 bps earlier this month, the Aussie central bank rate of 4.75% is proving more attractive than ever to investors. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.1224

The New Zealand Dollar has continued to pick up support after the upward revision to the NZ GBP figure mid-week. The Kiwi made further gains when Reserve Bank of New Zealand Governor Alan Bollard commented that the NZ economy would benefit from ‘a very big’ construction boom, following the Christchurch earthquake. With no NZ data releases of note until Tuesday night, the Kiwi Dollar uptrend is likely to continue. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5689

The CAD picked up some support throughout today’s session as the price of a barrel of crude oil remained above $115. The situation in the Middle East remains volatile, meaning that the spectre of a new spike in oil prices remains, which would benefit the Canadian Dollar in its role as a proxy for oil trading. Political uncertainty has not had an adverse affect on the CAD as yet. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVIVE.

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