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

26 Aug 2011 at 6 PM - Written by John Cameron

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

POUND STERLING

The pound has had a mixed day today. Sentiment is still poor for the UK economy and the outlook for economic growth is still marginal. The Office for National Statistics has confirmed that the UK economy grew just 0.2% in the second quarter. Factors such as the April bank holiday, the Royal Wedding and the Japanese Tsunami have been blamed.

NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6374

The USD has seen a great deal of volatility today and is currently a cent below the daily high. Volatility fuelled by disappointing US GDP figures and Bernanke’s comments at the Jackson Hole Economic Symposium has seen renewed USD buying. Surprisingly Bernanke has indicated that further stimulus may be required yet Bernanke did reflect back on the recent August meeting and reiterated that they have many tools in their arsenal to help provide more economic stimulus. Talk of fresh quantitative Easing has not been used however financial aid packages amounting to a similar result could be on the cards. We would remain pessimistic on the USD rally and would be surprised if there isn’t retracement moving into next week

NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1294

Europe’s single currency has traded in a tight range today trading around the 1.13 mark. The Euro is fundamentally supported against the pound on higher yield however a significant break below 1.13 cannot be sustained with the current ongoing concerns on European sovereign debt risk. We would expect renewed concerns on sovereign debt contagion in the next fortnight and would remain negative on the Euro.

NEAR-TERM OUTLOOK –NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5404

The AUD has benefited from a pick-up in risk appetite and has strengthened in line with the other higher yielding currencies we would expect the AUD to strengthen as long as focus remains off the Euro. If as expected we see another flair up in the European sovereign debt crisis we would expect to see a move back towards 1.60. NEAR-TERM OUTLOOK – NEUTRAL - NEGATIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.3167

The Swiss Franc has lost close to 2% on the day, it is clear that market participants are either losing faith in the Swiss franc as a safe haven or have realised that it had achieved a vastly overvalued position . NEAR-TERM OUTLOOK – NEUTRAL. To Negative

For other live currency exchange rates and a currency converter see the currency news website.

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