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

Published: Thursday, 22 September 2011 14:45 BST - Written by John Cameron

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

POUND STERLING

This morning’s CBI Trends data came out worse than had been anticipated, but this has had a limited effect on the Pound during today’s session, as it is viewed as tier two data by investors. The levels on GBP pairs have largely been determined by the non-Sterling currency during the day, with massive moves for the high-yielders and for reserve currencies alike. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5379

The Dollar has continued to power forward against the other majors over the last 24 hours as investors express their relief that the Federal Reserve is to attempt to keep interest rates low by replacing short term bonds with gilts with longer-term maturities in a ‘twist’ operation, rather than once again resorting to Quantitative Easing. The Dollar has made further gains thanks to a dramatic drop off in global appetite for risk as evidenced by a fall of 5% or more in the value of many major European stock markets. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1443

This morning’s French, German and whole-of-Eurozone PMI surveys came out worse than investors had expected, but only marginally so. The Euro continues to hold its own in the currency markets in the absence of any further negative information from Greece or Italy. However, when calm is restored to equity markets following their recent plunge, investors’ focus may return to the Eurozone’s residual debt problems. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5719


The Australian Dollar has suffered heavy selling pressure over the last 24 hours as market participants’ appetite for risk evaporated following US Federal Reserve Chairman’s comments on the parlous state of the global economic situation during last night’s post-FOMC press conference. Further downside is likely for the Aussie over the next 24 hours as world equities markets continue to nosedive. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


ARAB EMIRATES DIRHAM – The Pound Dirham exchange rate (GBP/AED) is 5.6490

The Dirham remains directly pegged to the US Dollar, so any relative strength, or weakness, in the USD is directly mirrored in Dirham movements. The Dollar has made massive gains on the currency markets over the past month, with several central banks downgrading their growth projections for the world economy over the next two years and economic data pointing to a serious slowdown in the US housing and labour markets. With the GBP AED rate nearing a 14-month low, it looks a prime opportunity for UK investors needing to send Dirhams back home to act. NEAR-TERM OUTLOOK – POSITIVE.


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