FX Forecasts: Australian, New Zealand + Canadian Dollar Exchange Rates Forecast To Climb If BoJ & ECB Ramp Up QE

August 6, 2014 - Written by John Cameron

STORY LINK FX Forecasts: Australian, New Zealand + Canadian Dollar Exchange Rates Forecast To Climb If BoJ & ECB Ramp Up QE

Currency News UK: Forex Forecasts: Australian Dollar, New Zealand Dollar and Canadian Dollar Exchange Rates Predicted To Climb If BoJ and ECB Ramp Up QE - Global share markets have suffered a pronounced wobble in the 24hrs which have followed yesterday’s publication of the latest ISM survey of the combined non-manufacturing sectors of the US economy.

The data revealed that activity levels in the tertiary sector of the US economy are expanding at their fastest pace for almost a decade, leading analysts to conclude that US interest rates may be heading northwards sooner rather than later. Investors fear that economic growth in the world’s emerging markets is not yet strong enough to tolerate such a move from the world’s number one central bank and the market has shifted out of risk as a consequence.

Meanwhile, official figures released earlier today confirming that perennial eurozone debt struggler Italy has once again lapsed into recession added to the mood of gloom amongst equities traders. The numbers showed that Gross Domestic Product had contracted by 0.2% in the Mediterranean State during the three months leading up to the end of June. The first quarter of the year saw economic activity decrease by 0.1%, meaning that Italy is now in recession. Share markets in the euroland slumped in response to the news, with Frankfurt’s Dax shedding 1.17% of its value by the middle part of the day.

Elsewhere, the Pound has put in a reasonable performance on the day, in spite of a below par showing from June’s Industrial and Manufacturing Production numbers, published earlier. This morning’s Halifax House Price survey for July showed that British property prices increased at their highest rate for almost seven years last month. The year-on-year growth of 10.2% suggests that the Bank of England’s efforts to curb spiralling prices by tightening mortgage rules has, up to this point, had little effect on the domestic housing market. The Pound Sterling is likely to enjoy further near-term gains if housing market surveys continue to beat expectations.

Looking ahead, the best hope for investors holding equities is that the Bank of Japan will, in the face of disappointing domestic export figures in recent months, opt to ramp up its Quantitative Easing programme once more at next month’s policy meeting. If such a move is accompanied by further hints from the European Central Bank that it is on a pathway to introducing its own version of QE, then look for global risk appetite to pick up, sending the VIX ‘fear index’ lower and favouring the Australian, New Zealand and Canadian Dollars, (AUD, NZD & CAD).

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