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

6 Oct 2011 at 3 PM - Written by John Cameron

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

POUND STERLING

The Pound gave up significant ground against the other majors following the announcement by the Bank of England that it is set to extend its quantitative easing scheme by £75bn. With only one MPC member, Adam Posen, having voted for an increase to QE in recent months, up to and including last month, it was a surprise that a majority of the nine-man committee voted in favour today. Given yesterday’s downgrading of the UK’s Q2 GDP figure, today’s news may see Sterling start a new downtrend against the other majors. NEAR -TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5402

The Greenback has had a subdued day in the currency markets today as the Pound and the Euro hogged the limelight thanks to their monetary policy decisions. The Dollar will be back in the headlines tomorrow with the release of this month’s Non-Farm Payrolls figure. Yesterday’s better-than-anticipated US Employment Change numbers have upped the ante; if tomorrow’s NFP numbers show a similar improvement, the Dollar may weaken thanks to an improvement in global appetite for risk. NEAR-TERM OUTLOOK – NEUTRAL.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1470

The ECB avoided the temptation to ease its monetary policy following recent soft data releases and opted to keep Eurozone interest rates on hold at 1.5% this afternoon. ECB President Jean-Claude Trichet’s last press conference before he steps down, which followed the announcement, was downbeat regarding Europe’s real economy; Trichet observed that Eurozone growth will be very moderate in the second half of 2011 due to ‘high uncertainty’ regarding sovereign debts and the European banking sector. The net effect was Euro-neutral. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5854

The Australian Dollar has continued to trend stronger against almost all of the other 16 most-actively-traded currencies on the market today, as global investors recover their nerve following the Eurozone debt-panic of earlier in the week. There is little Australian data of note due for release between now and the end of the week, so the main risk event of note for the Aussie comes tomorrow afternoon in the US in the form of the release of this month’s Non-Farm Payrolls figure. A healthy number will help sustain the Australian Dollar’s recovery. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 1.9987

The New Zealand Dollar has recovered its poise over the past twenty-four hours following a torrid two weeks which saw both S&P and Fitch downgrade New Zealand’s sovereign debt rating by a notch and stock markets wobble, leading to a decreased demand for high-yielding currencies. The GBP NZD rate has rapidly accumulated from the mid-1.80s to threaten 2.0500 during this period. The fact that it is now drifting back down suggests that we may have seen a key-reversal. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


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