Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, NOK

Published: Monday, 19 December 2011 15:35 BST - Written by John Cameron

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

POUND STERLING

This morning’s Rightmove House Price survey showed that British property prices have increased by 1.5% over the past 12 months. With general UK price inflation running at close to 5%, this implies a devaluation in the real value of UK property – bad news for investors who were hoping for a housing boom to fuel a recovery in the British economy. NEAR-TERM OUTLOOK – NEUTRAL.


US DOLLAR – The Pound Dollar exchange rate (GBP USD) is 1.5525

The US Dollar has performed strongly on the day, in spite of relatively light trading volumes. Support for the Greenback has been driven by a renewed bout of global uncertainty following the death of North Korean leader Kim Jong-il over the weekend. Fears over the future stability of the Korean peninsula were accentuated by unconfirmed reports that North Korea had test fired a missile just before Kim Jong-il’s death was announced to the world. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP EUR) is 1.1922

Spain’s new Conservative Prime Minister, Mariano Rajoy, has announced to the Spanish parliament that he is set to introduce deep cuts in public spending in order to reduce Spain’s giant budget deficit. Rajoy’s words were music to the ears of market participants, however the Euro has continued to labour on the day, following Fitch’s downgrade of their assessment of France’s economic prospects from ‘stable’ to ‘negative’. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NORWEGIAN KRONE – The Pound Norwegian Krone exchange rate (GBP NOK) is 9.2403


The Norwegian Krone has suffered considerable downside over the past week following last week’s action by the Norwegian Central Bank to cut its key lending rate from 2.25% to 1.75%. The move caught investors on the back foot, as many analysts had anticipated a 25 basis point cut, but few had predicted a cut to 1.75%. The move came as a response to escalating fears over a global downturn, which would hit Norway’s key oil exporting industry harder than most. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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