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

Published: Friday, 7 October 2011 15:57 BST - Written by John Cameron

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

POUND STERLING

This morning’s UK Producer Price Index data for September came out higher than had been anticipated, indicating that British factory gate prices are still rising at an accelerating rate. The figure traditionally acts as a leading indicator of future price rises for consumers; if this holds true, then the Bank of England may have to consider a tightening of UK monetary policy sooner than they would like to. NEAR -TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5625

This afternoon’s US Non-Farm Payroll figure for September printed at 106,000, significantly higher than analysts’ expectations that only 60,000 new jobs had been created in the world’s largest economy last month. This strong labour market figure has caused a pick-up in global appetite for risk, leading investors to sell off their US Dollar-denominated safe-haven positions. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1577

German Industrial Production data for August, released earlier today, showed that the industrial output of Europe’s leading economy showed a monthly contraction in August. Combined with yesterday’s gloomy prognosis for the future growth prospects for the Eurozone economy from ECB President Trichet, this adds up to very bad news for the Euro, which has given up over half a percent against both the Pound and the Dollar on the day. NEAR-TERM OUTLOOK – NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5859


The Australian Dollar has been the best performing of the sixteen most actively-traded currencies so far during today’s session. Investor confidence has seeped back into the market since the announcement from the Eurozone’s Finance Ministers, earlier in the week, that they are delaying a decision on Greece’s qualification for its next tranche of bail-out funding until November. This afternoon’s highly positive US employment data has also helped the risk-sensitive Aussie. NEAR-TERM OUTLOOK – POSITIVE.


ARAB EMIRATES DIRHAM – The Pound Dirham exchange rate (GBP/AED) is 5.7385

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 Dirham has been strongly supported over the past few weeks due to the US Dollar’s safe haven gains which have been caused by investors’ jitters over a potential Eurozone debt meltdown and anaemic growth forecasts from various central banks. However, today’s encouraging Non-Farm Payroll data in the US and a reduced level of market rumours regarding Greece and Italy’s demise over recent sessions may now cause the Dollar/Dirham to leak support. NEAR-TERM OUTLOOK – NEGATIVE.


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