Pound To Euro Exchange Rate Under Pressure, USD and AED Also Predicted To Suffer

August 21, 2012 - Written by Ben Hughes

STORY LINK Pound To Euro Exchange Rate Under Pressure, USD and AED Also Predicted To Suffer

The POUND STERLING has endured a shaky session in the currency markets so far today. This morning’s Public Sector Net Borrowing figures revealed that Britain’s government borrowed some GBP600m more last month than analysts had been anticipating. July is traditionally a strong month for government revenues thanks to clement weather and an influx of tourists, so the figures, which suggest that the ruling coalition’s austerity measures are not working, could be damaging for the Pound moving forward.

The US DOLLAR has suffered pronounced downside on the day, thanks largely to the Chinese government’s overnight announcement that it was injecting a massive liquidity boost into the country’s domestic banking sector. As has been the case so often in recent times, direct action from a major central bank equals improved global risk appetite equals a weaker Dollar. The current GBP USD exchange rate stands at 1.5764, but the pair is showing signs that it may head higher.

The EURO received a fillip earlier today, when the latest Spanish bond auction saw the troubled Iberian state shift €4.4bn of short term debt at lower rates of interest than at the previous sale. With the eurozone data schedule almost empty until Thursday morning’s German GDP data, the single currency could head higher in the near-term. The current GBP EUR exchange rate stands at 1.2695.

The ARAB EMIRATES DIRHAM remains directly pegged to the US Dollar, so any relative strength, or weakness, in the USD is directly mirrored in Dirham movements. Last night’s announcement of positive action by China’s policymakers has hit the Dirham hard and a go-ahead set of Australian central bank minutes, have elicited a forward move for global stocks, meaning that there could be tough times ahead for the AED. The current GBP AED exchange rate is 5.7905.

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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts