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

4 Apr 2011 at 4 PM - Written by John Cameron

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

POUND STERLING

A thin day for UK data saw the Pound enjoy gains almost across the board. This morning’ s PMI construction data came out better than anticipated, fuelling fears that rising UK price rises may gain their own momentum, forcing the Bank of England to take action. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1339

Futures markets continue to price-in a 100% chance of a rate increase of at least a 25bps on Thursday by the ECB. Rumours of a 50bps hike appear to be cooling and have been replaced by market talk that projected rate hikes may stall the Eurozone’s tentative recovery. This has caused the Euro to lose some ground against the majors today. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6120

With appetite for risk building again following recent natural disasters, the US Dollar appears to be the biggest net loser. Today saw a light schedule for US data releases meaning that the Dollar trended weaker following Friday’s positive employment data. Investors hoping for further Dollar weakness should be wary of the increasingly hawkish tone of comments by Federal Reserve members. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5576

The Australian Dollar appears to have reached a level that it is comfortable with against the majors following its spectacular run of recent weeks. The RBA meets overnight to decide on Australian monetary policy for the coming month. It would be a surprise if the Australian Central Bank elected to raise rates from their current level of 4.75%, given the recent soft nature of Australian economic data. If they hold rates, the Aussie could begin to re-trace. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.1023

The New Zealand Dollar is benefitting from rumours that the RBNZ is considering an increase to interest rates in the near-term, as the NZD continues to gain from the ongoing commodities rally. Commentators have also noted that the Kiwi Dollar is being dragged higher by the Aussie, as more funds flood into the Australasian region. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5609

The CAD lost a small amount of ground on the day. However, this situation is unlikely to continue as the price of crude oil rallied to a new 30 month high during today’s session. This afternoon’s Canadian Business Survey proved a little disappointing, hurting the CAD, but any minor losses incurred today are likely to be reversed in coming sessions if oil stays high. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVIVE.

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