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

Published: Monday, 26 September 2011 16:57 BST - Written by John Cameron

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

POUND STERLING

No UK data releases of note meant that the focus in the markets was firmly off the Pound during today’s session. This could change tomorrow with the release of the latest Nationwide UK House Price Survey – recent British housing data has pointed to a slowdown, so tomorrow’s number will be closely watched. NEAR-TERM OUTLOOK – NEUTRAL.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5547

The Greenback has come under significant selling pressure in the market today as rumours emerge from Washington regarding an IMF plan to shore-up the Eurozone’s finances. The plan, which reports suggest will see the ECB quadrupling the €440bn currently allocated to its European Financial Stability Facility, looks like it may calm investors’ nerves and put a stop to global stock market losses, for the moment at least. NEAR-TERM OUTLOOK – NEGATIVE.


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

It would appear that European policy-makers are finally on the verge of giving the Eurozone what investors have been looking for over the last few months – a road-map out of the current sovereign debt crisis. News is emerging from the IMF in Washington of a comprehensive package to resolve the crisis – this will involve beefing up the ECB’s bail-out fund to €2tn, but will also see Greece write-down half of its current debt obligations. At this stage, Greece’s proposed partial default is dragging the Euro lower, however the long-term effects of the package will surely be Euro-positive. NEAR-TERM OUTLOOK – NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5953


The Australian Dollar has experienced heavy selling pressure on the day today, with the GBP AUD rate breaking back above the 1.6000 level for the first time since 9th August. The Aussie has suffered at the start of this week’s session as market participants express their concern that this weekend’s Finance Ministers’ meeting in Washington failed to yield any concrete results. However, with appetite for risk now improving thanks to rumours of an IMF-led beefing up of the ECB’s bail-out package, the Aussie may have reached its near-term nadir. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0155

The New Zealand Dollar has come under heavy selling pressure during today’s session, following the overnight release of some poor New Zealand trade data. The figures showed that August’s domestic trade deficit was twice the anticipated level; this was particularly bad news for the Kiwi as New Zealand is more dependent on the export of commodities and raw materials than almost any other nation, due to its size and geographical location. If investors’ appetite for risk starts to return as the week progresses, then the Kiwi may claw back some of the ground it has lost over the past week. NEAR-TERM OUTLOOK – NEUTRAL.


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