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

Published: Friday, 15 July 2011 13:36 BST - Written by John Cameron

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

POUND STERLING

Levels on Sterling pairs have been determined by the relative strength of other currencies today, in the absence of any UK data releases. Next week’s session begins with the release of the Rightmove House Price Survey for July, which will be Sterling-negative if it shows a continuation of the recent weakening trend in UK house prices. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6104

The Dollar has traded steadily against the other majors since its sharp downward move of Wednesday.However, the Greenback remains in a precarious position; on the one hand Fed Chairman Bernanke provided support for the Dollar when he apparently back-pedalled on Wednesday’s threat of further US Quantitative Easing yesterday, while S&P’s statement last night estimating a 50% chance of a downgrade to the US’s AAA credit status caused downside pressure. NEAR-TERM OUTLOOK – NEUTRAL.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1403

Investors holding Euro-denominated assets have been sitting on their hands during the first half of today’s European session, causing the Euro to trade in a tight range against the Pound and the Dollar. Market participants are waiting on Italy’s lower house to pass a stringent austerity budget and for the results of the European Banking Authority’s latest Stress Test, released at 1700hrs BST, before they adjust their existing positions and take on new ones. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5107


The Australian Dollar has come under selling pressure in the markets today, with the GBP AUD rate breaking above 1.5100 for the first time this month. The move against the Aussie has been fuelled by increased appetite for risk in global markets as fears over the Eurozone sovereign debt subside following the Italian Senate’s vote in favour of a strict austerity package yesterday. The selling pressure on the Aussie is likely to ease off if this afternoon’s European retail bank stress test shows that fewer than 15 European banks are facing liquidity difficulties. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5451

The GBP CAD rate traded down to its lowest level in over 12 months last Friday, but has picked up 2c in the intervening period as speculators take profit. With Chinese and Japanese data showing signs of firming up, following the poor releases of last month, further upside is possible for the Canadian Dollar, providing Canada’s major trading partner, the US, avoids a debt downgrade due to the continuing procrastination of policy-makers in hammering out a deal to raise the US’s debt ceiling. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


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