Daily Foreign Currency Predictions For The Swiss Franc, US Dollar, Euro and Pound Sterling

Published: Thursday, 1 March 2012 18:00 BST - Written by Minesh Chaudhari

STORY LINK Daily Foreign Currency Predictions For The Swiss Franc, US Dollar, Euro and Pound Sterling

The UK PMI Manufacturing Survey, released earlier today, showed that Britain’s manufacturing sector expanded at a lower rate in February than it had in January. This held back the POUND STERLING on the day; if tomorrow’s PMI Construction survey disappoints, Sterling is likely to end the week on a NEUTRAL TO NEGATIVE footing.

The EURO put in a weak showing on the day following the release of whole-of-eurozone figures which showed that unemployment in the region is at an all-time high. This caused the euro to trade to a NEGATIVE bias against the Pound and the US Dollar, which is likely to continue into tomorrow’s session. The current GBP EUR exchange rate is 1.1964. If tomorrow’s eurozone Producer Price Index data, (a leading indicator of future inflationary trends), beats expectations, then there is the potential for a steadying of the euro’s ship.

The US DOLLAR has traded sideways against most of the other sixteen most-actively traded currencies on the day. The wholesale price of the world’s ultimate safe-haven asset - Gold - has tumbled by over 5% in the past 24 hours, suggesting that there is renewed investor confidence regarding the global economic recovery. There remains the possibility that improved appetite for risk will cause a delayed bout of US Dollar weakness before the weekend, so the Greenback is predicted to trade on a NEUTRAL TO NEGATIVE footing into tomorrow. The current GBP USD exchange rate is 1.5948.

The SWISS FRANC has benefitted from news that Switzerland’s economy expanded by 0.1% in the last three months of 2011. The official GDP data was better than expected, suggesting that the Swiss exporters are managing to weather the ravaging effects of a historically strong Franc. The data also showed that Switzerland enjoyed annualised growth of 2.6% last year – far exceeding the levels of most of the country’s neighbouring economies. However, the Franc remains artificially low because of the Swiss National Bank’s continuing policy of weakening the CHF. This means that the Franc is expected to trade with a NEUTRAL bias moving forward. The current GBP CHF rate is 1.4424.

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