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

Published: Friday, 8 July 2011 13:56 BST - Written by John Cameron

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

POUND STERLING

The Pound has performed steadily on the day against most of the majors, with GBP EUR making significant gains due to general Euro weakness. UK economic data has been of a more encouraging tone today, following yesterday’s highly disappointing NIESR GDP Growth Estimate, with Producer Price Index Input and Output figures both coming out better than anticipated. These numbers helped to steady the ship, but the Pound remains susceptible to downside due to low expectations of a BoE rate rise this side of Christmas. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6029

This afternoon’s key Non-Farm Payroll figure for June showed that a paltry 18,000 new jobs were created in the US last month, against analysts’ expectations that 108,000 new positions had been created. To add insult to injury, May’s counterpart figure was downgraded from an already disappointing 54,000 to 25,000. The market’s knee-jerk reaction was to sell-off the Greenback, but as investors recover their poise, it is possible that the Dollar make gains because of its safe-haven status. NEAR-TERM OUTLOOK – NEUTRAL POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1198

The Euro has performed weakly on the day, with EUR USD trading down by 0.95% by the middle of Europe’s morning session. This move against the Euro has been fuelled by ECB President Jean-Claude Trichet’s observation yesterday that economic activity in the Eurozone appeared to be slowing. Trichet’s statement was backed-up by disappointing Italian Industrial Production numbers this morning, as well as German Trade Figures which showed that the Europe’s largest economy is becoming increasingly dependent on imports. NEAR-TERM OUTLOOK – NEUTRAL .


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4942


The Australian Dollar has continued to perform strongly during today’s session, sending the GBP AUD rate to a new multi-decade low of 1.4795 in early trading. It appears unlikely that GBP AUD has bottomed out just yet, however with recent dovish comments from the RBA and soft Japanese data releases raising questions regarding the economic strength of one of Australia’s major trading partners, scope for some limited upside exists for the pair, particularly in light of this afternoon's poor US employment sector data. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5467

Canadian employment sector data, released this afternoon, showed a healthy level of job creation in June. This number stood in stark contrast to the disappointing US Non-Farm Payroll figure, released shortly afterwards. The poor employment number’s in Canada’s primary trading market has already seen a CAD sell-off, which is likely to continue into next week. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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