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

18 Jan 2012 at 6 PM - Written by John Cameron

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

POUND STERLING

There was more cause for concern for Britain’s real economy today, following the release of the latest UK government unemployment statistics. The figures showed an increase in the British jobless total of 118,000 in the three months to the end of November last year, suggesting that the government’s austerity measures are beginning to hit hard. Investors holding the Pound may have to wait until Friday, with the release of December’s UK Retail Sales numbers, for Sterling sentiment to improve. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP USD) is 1.5404

The Greenback has performed weakly on the day, giving up over 0.50% against both the Pound and the Euro. With global share markets edging forwards during today’s session, then the safe-haven US Dollar may continue to weaken, at least until tomorrow afternoon’s US CPI inflation data release. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP EUR) is 1.2021

The beleaguered Euro came in for some much-needed support during the early part of today’s European session, as reports emerged that the International Monetary Fund was seeking to boost its reserves by up to $600bn, with a view to increasing the size of bail-out funding available to debt-troubled Eurozone states. However, Europe’s single currency dropped back later in the session, as these rumours were largely discredited – experts suggested that such an expansion of the IMF’s battle chest would be dependent on the US Congress providing its consent – a highly unlikely scenario. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


JAPANESE YEN – The Pound Japanese Yen exchange rate (GBP JPY) is 118.34

The GBP JPY exchange rate remains perilously close to a multi-decade low, following a major strengthening of the safe-haven Yen since the global credit crisis of 2007. With the GBP JPY exchange rate bumping along the bottom of its range at sub-120 levels, a technical move forward can not be ruled out in the near term, particularly as several well-respected analysts have suggested that Japan’s currency is now over-valued by up to 25%, given that the days of Japanese current account surpluses appear to be over. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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