Currency Exchange Rates: Currency predictions - GBP, EUR, USD, AUD

28 Oct 2011 at 6 PM - Written by John Cameron

STORY LINK Currency Exchange Rates: Currency predictions - GBP, EUR, USD, AUD

POUND STERLING
The Pound has recovered most of its losses from yesterday’s session benefiting from a recovery in Global stock markets and general good feeling in the market. The UK economy has a significant exposure to the European sovereign debt crisis and it is therefore likely that at least in the short term the Pound will hold onto its current price levels against the majority of the majors.

NEAR-TERM OUTLOOK – NEUTRAL

US DOLLAR – The Pound Dollar exchange rate (GBP USD) is 1.6130
The Greenback has lost further ground today as investors continue to sell safe haven assets and continue to seek risk on assets such as high yielding currencies and stocks. We would argue that this move could continue to 1.64 in the coming weeks if news continues to indicate that major Global economies are recovering a little faster than expected.

NEAR-TERM OUTLOOK – NEGATIVE

EURO – The Pound Euro exchange rate (GBP EUR) is 1.1388
The elation following the announcement of the positive outcome of the Eurozone sovereign debt deal has already started to subside. This afternoon session has seen the euro soften 0.3% as traders take profit ahead of the weekend, as discussed in this morning’s report it is likely that the wave of positive sentiment will be replaced with the harsh reality of facts associated with the debt deal. The fundamental problems in the Eurozone have not gone away overnight and it is likely that traders will look to profit from a relief rally.

NEAR-TERM OUTLOOK – NEUTRAL

AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP AUD) is 1.5061
The risk based trading approach that has seen the market move to a low of 1.5006 against the Pound appears to have faltered in trade this afternoon. The Euro positive sentiment has faltered and in turn the Aussie Dollar is hesitating above the key psychological level of 1.50. We would argue that positive feeling is likely to carry into next week and there is still a good chance of a move back under 1.50. Whether this will be sustained or not is a difficult call we would suggest that a move back towards the mid to high 1.50’s is more likely in the medium term

NEAR-TERM OUTLOOK – NEUTRAL POSITIVE.


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