Pound to Aus Dollar, NZ Dollar and Canadian Dollar: Exchange Rate Gains Forecast Following World Bank Forecast

January 14, 2015 - Written by John Cameron

STORY LINK Pound to Aus Dollar, NZ Dollar and Canadian Dollar: Exchange Rate Gains Forecast Following World Bank Forecast

The old refrain of equities traders states that, ‘when VIX is high, it’s time to buy’. If this adage holds even a grain of truth, then a feeding frenzy of share trades may be on the way.

VIX Spikes

The VIX ‘Fear Index’, which gauges protective ‘put’ orders placed by Chicagoan equities traders, opened up sharply high today, touching 22.82 a short time ago. The key indicator had been languishing in the 16.000s as last week’s session drew to a close, so the forward move was significant in nature.

World Bank Slashes GDP Forecast

The increase in fear levels amongst market participants was driven by a downbeat assessment of the global economic situation from the World Bank, published earlier today, which contained a considerable trimming of the institution’s 2015 and 2016 global GDP growth forecasts. This year’s prediction, in particular, was damaging to investor sentiment, with the World Bank trimming its previous prediction of 3.4% to a relatively lowly 3.0%. London’s benchmark FTSE 100 had shed well over 2.0% of its value by the middle part of the trading day, while the broad-based S&P 500 opened up down by over half a percentage point a short time ago.

Global Economy Over-reliant on US

The World Bank’s Chief Economist Kaushik Basu warned that the world economic system is placing all of its eggs in one basket, stating that, ‘the global economy is running on a single engine...The American one. This does not make for a rosy outlook.’

Poor US Retail Sales Numbers

Grim data from the US added to levels of nervousness amongst investors this afternoon; the Advance Retail Sales data for the key month of December showed a hefty year-on-year decrease of 0.9% - analysts had been predicting a negative figure of just 0.1%, so the release added to the bleak mood in the markets.

Gains Forecast for AUD NZD CAD

The shift out of risk amongst investors hit the Commodity Dollars hard, sending the Pound Sterling Australian Dollar exchange rate up to as high as 1.8784 earlier on. Meanwhile, the Pound Sterling New Zealand Dollar exchange rate broke back above the 1.9700 threshold a short time ago. Further gains are forecast for Sterling against AUD, NZD & CAD as the weekend shutdown draws closer.

Latest GBP, AUD, CAD and NZD Exchange Rates

The Pound to Australian Dollar exchange rate today is converting +0.54 per cent higher at 1.86640 GBP/AUD.
The Pound to Canadian Dollar exchange rate today is converting +0.37 per cent higher at 1.82017 GBP/CAD.
The Pound to Euro exchange rate is +0.21 pct higher with a conversion rate of 1 GBP equals 1.29063 EUR.
The Pound to New Zealand Dollar exchange rate today is converting +0.44 per cent higher at 1.96778 GBP/NZD.
The Pound to US Dollar exchange rate is +0.34 pct higher with a conversion rate of 1 GBP equals 1.52191 USD.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Canadian Dollar Forecasts Currency Predi Forecasts