Pound Sterling Forecast to Rise vs Euro (EUR), US Dollar (USD) and Swedish Krona (SEK)

October 28, 2014 - Written by John Cameron

STORY LINK Pound Sterling Forecast to Rise vs Euro (EUR), US Dollar (USD) and Swedish Krona (SEK)

Monday's afternoon forex trading session in the global currency markets brought comments from a European Central Bank (ECB) policymaker which will send shudders down the spines of investors holding Euro (EUR) denominated assets.

ECB Governing Council member Christian Noyer, (also the Governor of the Bank of France), told the French Senate a short time ago that he confidently anticipated that the rate of inflation in the eurozone would be no higher than 0.6% by the end of this year.

Noyer went on to warn that the ECB’s board would not stand by and, ‘passively accept... that inflation is too weak in relation to our target’.

Investors are likely to interpret these comments as confirmation that a programme of all-out Quantitative Easing, which would see the euroland’s central bank bulk-buy the region’s sovereign debt, is on the cards.

In spite of Noyer’s words, the Pound euro exchange rate remained relatively static, trading in a tight band just below the 1.2700 GBP/EUR level.

Gains For Euro to Dollar Exchange Rate On US Data

Today’s session has seen the world’s most widely-traded currency pair climb by around 0.35%on the day; the EUR USD exchange rate edged higher following the publication of a brace of key US data sets this afternoon.

September’s version of the closely-watched Durable Goods Orders led the way and the result provided some cause for concern regarding the ongoing strength of the US economic recovery.

Analysts had been expecting a showing of 0.5% for the figure following the previous month’s shocking print of -18.3%.

When the release showed at -1.3%, support for the Buck began flagging. October’s US Consumer Confidence survey, published ninety minutes later, significantly bettered analysts’ expectations, showing at 84.5 versus an anticipated 87.0.

However, the net effect of the dual data sets saw the Buck give up ground across the board.

Gains Predicted For Pound vs Swedish Krona (GBP SEK)

Elsewhere, today’s session has also seen the Pound Sterling record strong gains against the Swedish Krona (currency:SEK).

The GBP SEK exchange rate jumped to as high as 11.9085 in early trading following larger than expected cut in its interest rates by the Swedish central bank.

The 25 basis point trimming of the cost of lending leaves Sweden’s interest rates at zero percent and analysts forecast that there could be further gains to come for GBP SEK following the Riksbank’s announcement today.

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