Forex Exchange Rate Forecasts for the Pound Sterling to Euro and the US Dollar

November 26, 2014 - Written by John Cameron

STORY LINK Forex Exchange Rate Forecasts for the Pound Sterling to Euro and the US Dollar

Currency News UK brings you today's currency forecast report for the Pound Sterling (currency:GBP), euro (currency:EUR) and the US Dollar (currency:USD).

A report from the widely-respected Organisation for Economic Co-operation and Development (OECD), published during yesterday’s session, made highly uncomfortable reading for investors holding euro-denominated assets.

The Pound to Australian Dollar exchange rate converts +1 per cent higher at 1 GBP is 1.85558 AUD.
The Pound to Canadian Dollar exchange rate today is converting +0.5 per cent higher at 1.77732 GBP/CAD.
The Pound to Euro exchange rate converts +0.37 per cent higher at 1 GBP is 1.26442 EUR.
The Pound to New Zealand Dollar exchange rate today is converting +0.3 per cent higher at 2.01406 GBP/NZD.
The Pound to US Dollar exchange rate today is converting +0.35 per cent higher at 1.57765 GBP/USD.

Bleak Euroland Prediction from OECD

The missive openly criticised the ongoing policy stance from the European Central Bank (ECB), stating that the overly-conservative set of measures adopted by the euroland’s reserve bank during recent months is threatening a widespread loss of confidence across the region.

In a strongly-worded passage, the OECD summoned up the spectre of the two decades of stagnant growth in Japan which followed that nation’s own banking crisis of the mid-1990s. The organisation warned that a continued laid-back attitude from Frankfurt risked plunging the euro area into its own crisis of confidence.

Weak Eurozone Growth Forecast

The OECD observed that economic expansion in the euroland, ‘will remain weak because of still-high public and private debt, tight credit conditions and high unemployment. The organisation went on to forecast that, ‘the crisis-related hit to potential output has been significant’ and warned that ‘geopolitical risks’ on the Eastern edge of Europe also represented a danger to the region’s ongoing prosperity.

QE Prescription for ECB

The OECD’s remedy for this funk, perhaps not surprisingly, involved the ECB severely ramping up its monetary policy loosening measures, with analysts concluding that the prescription for healing the eurozone’s malaise will have to involve all-out Quantitative Easing for the region. If the ECB does go down the sovereign debt purchase route, then expect the Pound Sterling euro exchange rate to climb up above 1.3000 GBP EUR sooner rather than later. Look out for the latest ECB policy announcement, penned in for a week tomorrow, to potentially send the pair through this psychologically-significant barrier.

Pound to Dollar Exchange Rate Forecast: Strong US Data Could Send GBP/USD to 1.5000

Highlights for today’s session include this morning’s UK Q3 GDP data and this afternoon’s US Durable Goods Orders number for last month.

Another strong showing from a major tier one data set this afternoon would be highly likely to see the Pound Sterling US Dollar exchange rate slump towards the 1.5000 threshold sooner rather than later.

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