Foreign Currency Exchange Rate Predictions For GBP EUR AUD USD

Published: Monday, 13 May 2013 14:00 BST - Written by Minesh Chaudhari

STORY LINK Foreign Currency Exchange Rate Predictions For GBP EUR AUD USD

With very little in the way of significant UK data releases until Wednesday morning’s jobs data, the POUND STERLING has traded on an even keel today. Last week’s suggestion that a revised set of construction industry data from the middle part of last year may mean that the British economy actually avoided entering a double dip recession could provide a near-term fillip for Sterling. The CBI’s assertion that levels of confidence amongst British companies is on the up means that the Pound is expected to trade with a NEUTRAL TO POSITIVE bias in the short term.

The EURO has traded steadily against Sterling so far today. The European Central Bank’s action of ten days ago, when it surprised investors by cutting its key lending rate by 25 basis points, looks to be fully factored-in to pricing on the single currency now. The GBP EUR exchange rate stands at 1.1847 and the fact that the pair has not managed to hold above the psychologically significant 1.1900 level suggest that investors fell that any further loosening of monetary policy by the ECB is unlikely. The euro is expected to trade with a NEUTRAL bias in the near-term.

The AUSTRALIAN DOLLAR has lost a little ground against the Greenback and the Pound in early trading today, sending the GBP AUD exchange rate up to its current level of 1.5409. Last night’s slightly weaker than expected Industrial Production and Retail Sales numbers have taken the edge off risk appetite and rumours abound that Treasurer Wayne Swan’s budget, which he delivers tomorrow, will allude to the need for a weaker Aussie in order to balance the national budget. The outlook for AUD is NEUTRAL TO NEGATIVE.

The US DOLLAR has given up a little ground against Sterling so far today, sending the GBP USD exchange rate up to 1.5379. Weekend reports that the Federal Reserve’s Open Market Committee has put in place a plan for curtailing its Quantitative Easing programme – a move which would strongly favour the Buck. Tomorrow’s domestic Industrial and Manufacturing Production data will be the next risk event of note for the Dollar, which is expected to trade on a NEUTRAL footing in the lead-up to this release.

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