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Forecast - Pound Sterling, US Dollar, Euro & Canadian Dollar - Foreign Currency Exchange Rate Predictions (GBP-EUR-USD-CAD)

August 16, 2014 - Written by John Cameron

Currency News UK presents the Pound Sterling, US Dollar, Euro & Canadian Dollar Foreign Currency Exchange Rate Forecasts (GBP EUR USD CAD) - The POUND STERLING (currency:GBP) recovered a little ground against several of the other sixteen most actively traded global currencies at the end of last week. A slightly better than anticipated showing from this morning’s domestic GDP figures for Q2 helped Sterling on the day; however, the impression persists that the UK unit remains overvalued across the board following Wednesday’s downgrading of its UK GDP and wage growth forecast by the Bank of England.

These predictions are likely to weigh down Sterling into the medium term. The short-term Pound Sterling forecast is now NEUTRAL TO NEGATIVE.

The current GBP forex positions are as follows:

The Pound to Canadian Dollar exchange rate is trading down -0.1% at 1.81810 GBP/CAD.
The Pound to Euro exchange rate is trading down -0.19% at 1.24641 GBP/EUR.
The Pound to Dollar exchange rate is trading up +0.07% at 1.66978 GBP/USD.

The worst weekly US Initial Jobless Claims data for six weeks held back the US DOLLAR (currency:USD) yesterday as investors pushed back their predicted date for the next Federal Reserve interest rate hike. This afternoon’s Michigan Confidence survey added to the gloom enveloping the Greenback, printing at 79.2 versus expectations of a showing of 82.5. With all being relatively quiet on the geo-political risk front, the near-term forecast for the Buck is now NEUTRAL TO NEGATIVE.

The USD takes the following positions in the global forex markets:

The Dollar to Canadian Dollar exchange rate is trading down -0.17% at 1.08883 USD/CAD.
The Dollar to Euro exchange rate is trading down -0.26% at 0.74645 USD/EUR.
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The Dollar to Pound exchange rate is trading down -0.07% at 0.59888 USD/GBP.

The EURO (currency:EUR) has continued to suffer weak levels of support during today’s session in the currency markets following yesterday’s below par German and whole of eurozone GDP figures. Next Thursday’s session could prove to be pivotal for the single currency, with the release of Manufacturing PMIs from both Germany and the eurozone followed by the publication of the latest regional Consumer Confidence survey. Any suggestion that optimism amongst economic participants in the euro area is beginning to ebb as the region edges closer to deflation could cause investors to shift out of euros. Analysts continue to forecast that the euro will trade with a NEGATIVE bias moving forward.

The latest EUR FX levels are like this today:

The Euro to Canadian Dollar exchange rate is trading up +0.09% at 1.45867 EUR/CAD.
The Euro to Pound exchange rate is trading up +0.19% at 0.80230 EUR/GBP.
The Euro to Dollar exchange rate is trading up +0.26% at 1.33967 EUR/USD.

The CANADIAN DOLLAR (currency:CAD) has once again improved against the Pound Sterling today, sending the GBP EUR exchange rate down to as low as 1.8128 earlier. A strong set of domestic job creation and overall unemployment figures this afternoon have fuelled the Loonie’s progress and the disappointing Michigan Sentiment survey in the States added to the positive feeling towards the Canadian unit. The prospect that the Federal Reserve will now maintain its ‘easy money’ policy stance into the medium term is likely to favour the Loonie into the medium term, meaning that the outlook for the Canadian tender is now NEUTRAL TO POSITIVE.

Lastly, we look at where CAD is positioned against the key majors:

The Canadian Dollar to Euro exchange rate is trading down -0.09% at 0.68556 CAD/EUR.
The Canadian Dollar to Pound exchange rate is trading up +0.1% at 0.55003 CAD/GBP.
The Canadian Dollar to Dollar exchange rate is trading up +0.17% at 0.91842 CAD/USD.
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