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

Published: Monday, 19 September 2011 14:19 BST - Written by John Cameron

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

POUND STERLING

The Bank of England’s Quarterly Bulletin, released earlier today, revealed the extent to which the UK’s £200bn asset purchase scheme has skewed British economic data in recent times. The Bulletin estimated that the bank’s QE policy may have added as much as 2% to the UK’s GDP figures, whilst it also estimated that the scheme added 1.5% to UK price inflation. These revelations would appear to make a rate hike by the Bank of England even less likely in the short-to-medium term. NEAR -TERM OUTLOOK – NEUTRAL.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5682

The Greenback has continued to garner significant support in the currency markets today as investors shift out of riskier assets and into the safe haven of US treasury bills in anticipation of bad news on Greece’s debt situation. With the Yen and the Franc out of favour due to central bank intervention in the currency markets by the Swiss National Bank and the Bank of Japan, the Dollar could strengthen further as the week progresses. NEAR-TERM OUTLOOK – POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1507

Greece’s debt crisis looks to be reaching a tipping point, threatening a run against the Euro in the currency markets. Greece’s Finance Minister, Evangelos Venizelos, used emotive language earlier today in stating that the troubled Hellenic state feels ‘blackmailed and humiliated’ by creditors who are reportedly calling for Greece to shed 20,000 public sector jobs before they will pay the next €8bn tranche of Greece’s bail out package. NEAR-TERM OUTLOOK – NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5366


UK and European share indices have once again lost ground on the day, meaning that the Australian Dollar has experienced another bout of selling pressure in the markets. The Minutes of September’s Reserve Bank of Australia’s policy meeting are released tonight and if they are as dovish in tone as July and August’s minutes, then tomorrow could see further downside for the risk-sensitive Aussie. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NORWEGIAN KRONE – The Pound Norwegian Krone exchange rate (GBP/NOK) is 8.9262

The Norwegian Krone has lost significant ground against almost all of the other majors on the day as the price of a barrel of crude oil dropped significantly. The downward move in oil prices has been driven by fears that the Eurozone’s debt crisis is about to escalate, potentially causing the global economy to ‘double-dip’ into recession once again. Norway’s economy would be hit particularly hard if Europe’s debt problems increased, due to its strong trade links with the Eurozone. NEAR-TERM OUTLOOK – NEGATIVE.


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