Foreign Currency Exchange Rate Forecasts For Pound, Euro, US Dollar & Australian Dollar

September 9, 2013 - Written by John Cameron

STORY LINK Foreign Currency Exchange Rate Forecasts For Pound, Euro, US Dollar & Australian Dollar

UK Chancellor George Osborne publicly stated earlier today that the British economy is ‘turning a corner’, but investors holding the POUND STERLING remain unconvinced. Sterling has gained ground on the day against the US and New Zealand Dollars but has struggled to push ahead against any of the other sixteen most widely traded global currencies. Investors remain wary of retaining the Pound due to the low level of return on their holdings and the likelihood that UK interest rates will remain at their current record low for years to come. The outlook for the Pound is NEUTRAL TO NEGATIVE.

The EURO has registered a small gain against Sterling so far today, sending GBP EUR down to 1.1854 earlier. The US Dollar has leaked support in the market on the session sending EUR USD higher and the buying pressure which this has triggered on the single currency has cause a downward drift for GBP EUR. Tomorrow morning’s Italian GDP data has the potential to derail the recent improvement for the euro, as does last week’s suggestion from ECB President Mario Draghi that the next move for eurozone interest rates may be lower. Analysts forecast that the single currency will trade with a NEUTRAL TO NEGATIVE bias moving forward.

The US DOLLAR has been friendless in the market so far today as market participants steer clear of the world’s reserve currency ahead of next week’s hotly anticipated Federal Reserve policy announcement. Price action for the Greenback hints that a large proportion of institutional investors believe that the Fed may avoid the temptation to begin trimming its massive Quantitative Easing programme this month. The Buck is expected to trade on a NEUTRAL TO NEGATIVE footing ahead of Friday’s key domestic Advance Retail Sales numbers and the current GBP USD exchange rate stands at 1.5723.

The AUSTRALIAN DOLLAR has given up ground against Sterling so far today in spite of the weekend news that the Liberal / National alliance had, as expected, won a landslide victory in Australia’s general election. Last night’s weaker than anticipated Chinese Imports data has harmed the Aussie thanks to its heavy reliance on strong levels of demand for Australian raw materials. If tonight’s NAB Business Confidence survey disappoints, then the potential exists for the Australian Dollar to give up further ground. In the meantime, the outlook for the Aussie is NEUTRAL.

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