Exchange Rate Forecasts - Pound (GBP), Euro (EUR), US Dollar (USD) & Australian (AUD) + Canadian Dollars (CAD) to Soften

July 9, 2014 - Written by John Cameron

STORY LINK Exchange Rate Forecasts - Pound (GBP), Euro (EUR), US Dollar (USD) & Australian (AUD) + Canadian Dollars (CAD) to Soften

Exchange Rate Forecasts - British Pound (GBP), Euro (EUR), US Dollar (USD) & Canadian Dollar (CAD) to Soften - The UK economic recovery appears to have picked up pace during recent months, with the overall level of British unemployment tumbling and Gross Domestic Product numbers returning to a respectable level. The upshot has seen the Pound Sterling (currency:GBP) outperform almost all of the other 16 most-actively traded global currencies during the past twelve months.

However, this morning’s session brought the publication of data which suggests that actions by British retailers are threatening to derail the tentative improcvement in the fortunes of UK PLC.

The latest statistics from the British Retail Consortium (BRC) suggested that domestic shop prices had tumbled by a year-on-year 1.8% during the twelve months to the end of June.

This figure represented the largest annualised fall in prices since the BRC began keeping records in 2006. The worrying data was blamed by analysts on a cut-throat price war between Britain’s retailers, with the nation’s supermarkets leading the way by instigating a ‘race to the bottom’ on staple foods including dairy products during the months since Christmas.

Sterling Edges Lower vs Euro and US Dollar

The Pound put in a lacklustre performance on the day and the disappointing performance was due in no small part to the unexpected report from the BRC.

The Pound to euro exchange rate edged down from an intraday high of 1.2585 to touch 1.2554 late on, while the Pound to Dollar exchange rate (GBP/USD) briefly broke down through the 1.7100 level on the day and is now threatening to settle back down in the 1.6000s once again. The US Dollar enjoyed a reasonably positive session ahead of tonight’s US Federal Reserve minutes.

Douglas Borthwick of Chapdelaine & Co. Spoke earlier about the reasons behind the move, stating that following last week’s go-ahead US jobs number, the market is, ‘looking for indication that perhaps the FOMC will be raising rates sooner than expected.’

Pound to Canadian Dollar (GBP/CAD) Forecast

Elsewhere, a slightly stronger than anticipated set of Canadian Housing Start data, out this afternoon, sent the Pound to Canadian Dollar exchange rate down to 1.8222 (GBP/CAD).

The leading indicator of activity in the Canadian housing market showed a slight decline in June from May’s counterpart figure; however the dip was not as pronounced as some analysts had been anticipating. Many investors are now forecasting that GBP/CAD may tumble down into the 1.7000s sooner rather than later.

Relevant Pound Sterling, Dollar & Euro Exchange Rates - 11th July 2014

The Pound to Australian Dollar exchange rate is trading down -0.08% at 1.82406 GBP/AUD.
The Pound to Canadian Dollar exchange rate is trading down -0.07% at 1.82306 GBP/CAD.
The Pound to Swiss Franc exchange rate is trading up +0.03% at 1.52964 GBP/CHF.
The Pound to Euro exchange rate is trading up +0.05% at 1.25970 GBP/EUR.
The Pound to Hong Kong Dollar exchange rate is trading up +0.07% at 13.28446 GBP/HKD.
The Pound to New Zealand Dollar exchange rate is trading down -0.05% at 1.94334 GBP/NZD.
The Pound to Dollar exchange rate is trading up +0.07% at 1.71412 GBP/USD.

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