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Exchange Rate Forecasts: Euro, Pound, Dollar and the Norwegian Krone

January 6, 2015 - Written by John Cameron

Currenbcy News UK Brings You Our Latest Exchange Rate Forecasts: Double Threat to Euro Persists



The EURO (currency:EUR) has improved slightly against Sterling during early trading today thanks in part to a stronger than anticipated French Consumer Confidence survey, published earlier.

However, a dual threat to the single currency continues in the form of potential political upheaval in Greece and all-out Quantitative Easing from the European Central Bank – both of which could happen during the latter part of this month.

Tomorrow’s German unemployment data and whole of eurozone CPI figures present a near term threat to the euro – in the meantime, expect the single currency to continue to trade on a NEGATIVE footing.

The Pound to euro exchange rate stands at 1.2752.

Pound Sterling Disappoints Again



The POUND STERLING (currency:GBP) has once again underperformed the market during today’s session. Yesterday saw a weak PMI Construction survey and this morning’s session brought an even more worrying data release for the Pound – the latest PMI survey of Britain’s services sector suggested that activity levels in this key area of the domestic economy grew at their slowest pace for some 19-months last month.

The impression that the UK economic recovery is stalling increases and the outlook for Sterling is now NEUTRAL.

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US Dollar Outperforms



The US DOLLAR (currency:USD) continued its march forward during today’s session, sending the GBP USD exchange rate down to an intraday low of 1.5163 earlier on. The Greenback has now gained over 20c against the Pound since the middle part of last Summer; however, some analysts are now of the opinion that the Buck’s Bull Run is losing momentum.

The consensus opinion amongst analysts is that the Dollar will record gains of a more moderate 3.5% against a trade-weighted basket of currencies during 2015, having improved by a walloping 13% last year.

The Buck is forecast to trade on a NEUTARL TO POSITIVE footing in the near-term.

Interest Rate Concerns for NOK



Today’s plunge to below the $55 level for a barrel of Brent Crude Oil has held back the NORWEGIAN KRONE (currency:NOK) on the day.

The development has stoked market whispers suggesting that the leading oil producing nation will need to cut its key interest rate in order to avoid plunging into a fresh economic recession. The Norges Bank surprised investors by cutting rates last month, but Governor Oeystein Olsen assessment that there’s a 50-50 chance of another cut later this year could weigh down the Krone moving forward. The outlook for the Norwegian tender is NEUTRAL TO NEGATIVE and the GBP NOK exchange rate stands at 11.7215.
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