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

9 Aug 2011 at 1 PM - Written by John Cameron

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

POUND STERLING

This morning’s UK Industrial Production figures showed a contraction in UK industrial output in June, placing pressure on the Pound and stoking analysts’ fears that British economic activity may once again be grinding towards a halt. If the NIESR GDP growth estimate prints at lower than last month’s 0.1% figure when it is released later today, then Sterling may be in for some downside. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6339

Support for the Greenback has eased during today’s session as investors nervously await the FOMC Monetary Policy decision and Ben Bernake’s subsequent press conference later today. If Bernanke re-iterates his recent assertions that the US will maintain its ultra-loose monetary policy for the ‘foreseeable future’, then the Dollar may be in for a renewed bout of selling pressure. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1451

The stock market collapse of the past week has diverted investors’ focus away from the Eurozone’s ongoing sovereign debt concerns. With investors buying up bonds in order to escape the drop in equities prices, the massive spreads paid by the Italian and Spanish governments have eased back; however, the Eurozone’s debt problems are a long way from being over. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6052

The Australian Dollar has haemorrhaged support once again as global stocks once again came under extreme selling pressure. Last night’s Chinese data, which shows that price inflation in the world’s second largest economy is accelerating added further pressure to already-ailing Asian stock markets, causing additional pressure on the Aussie. NEAR-TERM OUTLOOK – NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 1.9915

The Kiwi Dollar has been hammered in the markets over the last week, causing the GBP NZD rate to improve from 1.8583 last Tuesday to touch 2.0428 during last night’s session. With the drop in global stocks being attributed to fears over a slowdown in global economic activity, the NZD is experiencing the worst of both worlds, being classed as a risk-sensitive high-yielding currency and being dependent on the continuance of the global economic recovery in its role as an exporter of commodities. NEAR-TERM OUTLOOK – NEAGTIVE.


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