GBP EUR Currency Exchange Rate Forecast & USD AUD Predictions

Published: Tuesday, 19 March 2013 15:00 BST - Written by John Cameron

STORY LINK GBP EUR Currency Exchange Rate Forecast & USD AUD Predictions

A positive ZEW Economic sentiment survey, released this morning, was not enough to trigger a comeback for the EURO against the Pound on the day. Market participants continue to remain reticent about holding funds in euro-denominated assets thanks to the EU/ECB’s announcement of Cyrus’s onerous bailout conditions. The current GBP EUR exchange rate stands at 1.1694 and the outlook for the single currency is NEUTRAL TO NEGATIVE.

This morning’s UK CPI inflation revealed that the annualised level of price rises in Britain increased to its highest level for 9 months at 2.8% last month. The news makes a near-term increase in QE from the Bank of England’s monetary policy committee less likely, a development which has favoured the POUND STERLING. Investors will learn more about the MPC’s plans tomorrow morning when the latest MPC minutes are released. However, with tomorrow afternoon’s UK budget statement looming, Sterling is expected to trade on a NEUTRAL footing.

The wobble in risk sentiment which Cyprus’s tentative bailout has precipitated has caused some support for the US DOLLAR in the early part of the week. Trading volumes on the Greenback are likely to remain relatively light ahead of tomorrow evening Federal Reserve FOMC policy announcement. In the meantime, the ‘Buck’ is expected to trade with a NEUTRAL bias. The GBP USD exchange rate stands at 1.5131.

The AUSTRALIAN DOLLAR has given up ground against Sterling in the aftermath of last night’s Reserve Bank of Australia policy committee minutes, which dropped heavy hints that further Australian interest rate cuts may be on the cards for later in the year. With little in the way of domestic Australian data releases scheduled for the remainder of the week, the ‘Aussie’ remains in the thrall of global risk sentiment. Given the problems in Cyprus, it is anticipated that the AUD will trade on a NEUTRAL TO NEGATIVE footing in the short term. The GBP AUD exchange rate currently sits at 1.4581.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts