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

Modified: Monday, 5 September 2011 05:28 BST - Written by John Cameron

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

POUND STERLING

Growth in the UK construction sector showed a further slowdown last month according to the PMI construction survey released this morning. The figure represents the lowest reading since the turn of the year. Following on the coat tails of yesterday’s data which showed that the UK manufacturing sector is contracting, today’s building sector data was particularly bad news for Sterling. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6249

As often seems to be the case, this afternoon’s Non-Farm Payroll figure caused massive price action for the Greenback at the time of its release. When it came, the figure severely disappointed analysts, showing that no new jobs were created last month in the non-farm sectors of the world’s leading economy. The figure immediately caused investors to move out of stocks and into defensive bond plays, which is likely to see the US Dollar gain ground as this week’s session draws to a close. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1387

This morning’s whole-of-Eurozone Producer Price Index data showed an acceleration in the increase in input prices for Eurozone producers. Invariably, manufacturers will pass these price rises on to consumers, so the figure suggests that the single economic area may face higher prices as 2011 draws to a close, meaning further interest rate rises by the ECB are increasingly likely. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5159


The Aussie started the day strongly, leading the GBP AUD rate to trade down to within a cent of the key 1.5000 resistance level. However, the Australian Dollar gave up a lot of these gains as investors nervously awaited this afternoon’s US Non-Farm Payrolls figure. With the figure printing at a much lower than anticipated level, there could be further downside for the Aussie to come. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NORWEGIAN KRONE – The Pound Norwegian Krone exchange rate (GBP/NOK) is 8.7520

The NOK has pushed forward strongly against the other majors over the past two weeks as global appetite for risk improved following its nosedive of the early part of last month. The pick-up in global appetite for risk lead investors to price in stronger future demand for crude oil, Norway’s major export. However, this afternoon’s worryingly poor Non-Farm Payroll figure may have stopped this move in its tracks, leaving the Krone susceptible to selling pressure. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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