Exchange Rate Forecasts for the Pound Sterling, Euro and the Canadian Dollar

December 21, 2014 - Written by John Cameron

STORY LINK Exchange Rate Forecasts for the Pound Sterling, Euro and the Canadian Dollar

Pound Sterling to Euro Exchange Rate Gains on LTRO Stats

Friday morning’s session brought the news that the euroland’s retail banks had curtailed their repayments of older loans taken out with the European Central Bank (ECB).

The 3 year Long Term Re-financing Operations (LTRO) figure suggests that the eurozone’s bourses are taking advantage of new cheaper loans that Europe’s reserve bank has made available in order to repair their balance sheets.

Investors took the news as a positive for the euro (currency:EUR) – the Pound euro exchange rate was tipping the scales at close to the 1.2800 level during early trading this morning, but the pair retraced back following the publication of the LTRO data to trade down closer to the 1.2700 trading threshold.

Share Markets Steady

Elsewhere, global share markets have generally enjoyed another day of gains, although the forward movement has not been on the scale of yesterday’s surge Northwards.

By the latter stages of the European trading day, London’s FTSE 100 had traded up by just under half of a percentage point, while Chicago’s benchmark S&P 500 index edged higher by around a fifth of a percentage point during the early stages of the North American session.

Meanwhile, the closely-monitored VIX index has largely remained in the 16.000 so far today, suggesting that yesterday’s improvement in global risk sentiment is sticking.

Pound to Canadian Dollar Exchange Rate Forecast

Elsewhere, the Canadian Dollar has endured sustained selling pressure this afternoon which has sent the GBP CAD exchange rate Northwards from its intraday low of 1.8104 up towards the 1.8200 threshold.

Last month’s Canadian Consumer Price Index numbers showed that the pace of price rise increases was considerably below the annualised 2.2% anticipated by analysts.

It appears that the sharp downward movement in the price of a barrel of crude oil since the summertime has dealt a double blow to the Loonie.

On one front, the drop in the price of ‘Black Gold’ has hurt the Canadian economy, which remains heavily dependent on exports of the raw material for its ongoing wellbeing.

On the other hand, the drop in the rate of domestic price rises which the drop in crude has triggered has taken the pressure off the Bank of Canada to countenance an interest rate hike any time soon.

GBP/CAD Exchange Rate Predicted to Gain

Analysts forecast that the net effect has the potential to send the GBP CAD exchange rate Northwards into the middle part of the 1.8000 – 1.9000 trading range once more.

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TAGS: Canadian Dollar Forecasts Currency Predictions Euro Forecasts Euro Forecasts