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

Published: Thursday, 13 October 2011 13:55 BST - Written by John Cameron

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

POUND STERLING

The Pound has once again performed weakly during today’s session in the currency markets, in spite of this morning’s release of data which showed that the UK’s trade deficit narrowed to £1.9bn in August, thanks to record monthly export figures. With no further UK data of note due for release for the remainder of the week, Sterling’s drift may last until at least close of business tomorrow. NEAR -TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.5674

The US Dollar has gained ground against the Pound and the Euro so far today. This move has been driven by a dip in global investors’ appetite for risk, which has in turn been caused by downbeat forecasts and economic data releases over the past 24 hours. These have included a joint report, issued earlier today by eight leading European Economic Institutes, predicting a dramatic slowdown in German economic activity next year, meanwhile a separate report released by the IMF has downgraded the Fund’s pan-Asian growth forecasts for this year and 2012. NEAR-TERM OUTLOOK – NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1414

This morning’s whole-of-Eurozone CPI inflation data came out broadly in line with expectations and the ECB’s Monthly Report, which followed shortly afterwards, was predictably downbeat, echoing the fears over ‘downside risks’ to European economic activity which ECB President Jean-Claude Trichet aired in his final post-policy decision press conference earlier this month. Even though investors learnt nothing new about the Eurozone today, this has not stopped the Euro leaking support in the currency markets. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5441


The Australian Dollar has avoided the losses incurred by many of the other high-yielding and commodity-driven currencies and made limited gains on the day. Last night’s better-than-anticipated domestic employment data, which showed a healthy level of job creation in the Australian economy, looks to have precipitated the move, but if global appetite for risk continues to ebb away overnight, then the Aussie may not be able to avoid losses before this week’s session finishes. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 1.9795

Asian stock markets registered healthy gains last night, but UK and European indices are trading down on the day as investors scale back their exposure to risk thanks to worrying downgrades to Asian and German growth forecasts by the IMF and eight leading European think-tanks. This dip in risk appetite has caused the Kiwi’s recent forward move in the currency markets to come to a halt today. With very little NZ data due for release over the next seven days, the Kiwi Dollar’s fate will be determined by data releases from other larger economies. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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