D DAY for STERLING - Today's GBP EUR USD + AUD Exchange Rate Forecasts on Scottish Indpendence Vote

September 18, 2014 - Written by John Cameron

STORY LINK D DAY for STERLING - Today's GBP EUR USD + AUD Exchange Rate Forecasts on Scottish Indpendence Vote

Currency exchange rate analysts forecast significant price movement for the Pound Sterling (GBP), euro (EUR), US Dollar (USD) and Australian Dollar (AUD) exchange rates thanks to major risk events in the near future.

Today is D-Day for the POUND STERLING (currency:GBP).

Either, Scotland will vote to remain part of the 307-year old United Kingdom, or it will go it alone.

Analysts forecast that a ‘Yes’ vote to independence would trigger a sell-off which would see the UK unit decrease in value by at least 10%.

Conversely, a vote to maintain the status quo would send the Pound slightly higher against the other majors.

A ‘No’ vote remains the most likely outcome, so Sterling is forecast to trade on a NEUTRAL TO POSITIVE footing moving forward.

Yesterday’s marginally higher than anticipated August Consumer Price Index inflation data has helped the near term fortunes of the EURO (currency:EUR).

The morning’s announcement by the European Central Bank of the amount it will be allotting to its targeted Long Term Re-financing Operations is the next risk event of note for the single currency.

As a rule of thumb, the higher the amount, the greater the losses for the euro.

Tomorrow morning’s German Producer Price Index numbers take on added significance due to investors’ fears over deflation in the euroland;

In the meantime, the single currency is expected to trade with a NEGATIVE bias. The GBP EUR exchange rate stands at 1.2602.

The US DOLLAR (currency:USD) incurred a body blow yesterday afternoon following the publication of a lower than anticipated set of domestic inflation figures.

Analysts agree that the next Federal Reserve interest rate hike may now be some way off and the Buck has lost ground as a consequence.

Looking ahead, this afternoon’s US housing sector numbers will provide investors with further direction on the likely timing of an American interest rate hike; with weekly domestic jobs numbers also due for publication, there could be significant US Dollar price action before the day is out.

The Greenback is expected to trade with a NEUTRAL TO NEGATIVE footing in the near-term and GBP USD stands at 1.6330.

The AUSTRALIAN DOLLAR (currency:AUD) gave up almost a percentage point against Sterling during yesterday’s session as investors remained wary of taking on risk-laden assets.

However, this state of affairs has the potential to change following yesterday afternoon’s US inflation numbers which suggest that the world’s leading economy is sailing dangerously close to a bout of negative price rises.

The numbers tie the hands of the US Federal Reserve with regard a near-term tightening of its monetary policy, so the promise of more ‘easy money’ from the States may provide the Commodity Dollars with a considerable tail wind moving forward.

For this reason, look for the Aussie to trade with a NEUTRAL TO POSITIVE bias moving forward. The GBP AUD exchange rate stands at 1.8085.

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