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

27 Jul 2011 at 5 PM - Written by John Cameron

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

POUND STERLING

The Pound has sold off steadily from its 1.6436 high against the Dollar. Data from The Confederation of British Industry has helped to further illustrate the problems with a slowing economic recovery and it is now likely that the BoE will come under increased pressure to restart the Quantitative Easing program and therefore extend past the current £200Bn mark.
NEAR-TERM OUTLOOK – NEUTRAL - NEGATIVE

US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6349

US law makers are still struggling to find any common ground on how to resolve the escalating US debt crisis. The USD has continued to be sold off against most of its major counterparts and has now reached all time lows against the antipodes (AUD & NZD). It is argued that the debt deal is perhaps further away than ever despite the threat of any default and subsequent ramifications. We would therefore expect ongoing USD weakness in trade moving into the weekend.
NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1392

The single currency has depreciated against both the Pound and the USD on Greek Bailout news. Fears of contagion seem to flare at a moments notice as investors nervously take protective positions. It is surprising how far the Euro has advanced against the Pound and the Dollar this week and we could now be seeing a technical retracement helped by the ongoing concerns.

NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE

AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4831
The Australian Dollar has advanced for the second day in a row moving to a low of 1.4803 against the Pound. The AUD has gained on recent unexpectedly strong inflation figures. The figures have stoked the fire for interest rate policy. Consumer Price Index figures put the annual growth price growth rate at 3.6% to mark the highest reading in CPI for 2 ½ years. Previously the markets expected an interest rate cut in the coming weeks. Over-night index swaps now indicate that investors expect rate to remain on hold for the next 12 months.

NEAR-TERM OUTLOOK - POSITIVE

NEW ZEALAND DOLLAR – The New Zealand Dollar exchange rate (GBP/NZD) is 1.8807

The New Zealand Dollar has reached record highs today falling to 1.8717 vs the Pound 1.1411 vs the Dollar. The gain in the NZD is no great surprise as the Kiwi gains currently on both good and bad global news. It is the safest play amongst all of the major commodity currencies and looks set to continue strengthening on expected rate hikes from the reserve Bank of New Zealand.

NEAR TERM OUTLOOK - POSITIVE

TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions Euro Forecasts New Zealand Dollar Forecasts Pound Australian Dollar Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound New Zealand Dollar Forecasts Pound Sterling Forecasts