Exchange Rate Forecasts for Pound, Euro, Australian Dollar and US Dollar

January 21, 2015 - Written by John Cameron

STORY LINK Exchange Rate Forecasts for Pound, Euro, Australian Dollar and US Dollar

Pound Exchange Rate Forecast

The POUND STERLING (currency:GBP) enjoyed decent gains during yesterday’s session, hovering up gains as market participants continued to shift out of the euro ahead of tomorrow’s all-important European Central Bank policy decision. Sterling could enjoy further strong support if the ECB does announce that it will be bulk-buying euroland sovereign debt.

In the meantime, this morning brings the publication of domestic employment data and the latest Bank of England minutes, which are by no means guaranteed to favour the Pound.

The outlook for Sterling remains NEUTRAL TO POSITIVE.

Euro Exchange Rate Forecast: EUR Under Severe Pressure

Yesterday morning’s German factory gate price rise data showed at well below the level anticipated by analysts, heaping further pressure on the beleaguered EURO (currency:EUR).

The monthly figure is considered to be a key leading indicator of inflation, so the release would appear to make an announcement of all-out Quantitative Easing from the European Central Bank (ECB) a more likely outcome for tomorrow. A far better than expected set of ZEW sentiment surveys, also out yesterday, are unlikely to save the euro from further hefty losses.

The outlook for the single currency remains firmly NEGATIVE and the GBP EUR exchange rate stands t 1.3090.

Dollar Forecast to Benefit From Euro losses

Support for the US DOLLAR (currency:USD) eased during yesterday’s session as speculators continued to ‘take profit’ following the strong forward move from the Buck since last Summer.

This afternoon’s US housing sector data may well have an effect on investors’ expectations regarding the timing of the next interest rate increase from the Federal Reserve.

Meanwhile, any slump in support for the euro following the ECB’s hotly anticipated monetary policy announcement could see the Greenback record strong gains as the EUR USD exchange rate falls.

In the meantime, the Buck is forecast to trade with a NEUTRAL bias and the GBP USD exchange rate stands at 1.5147.

Australian Dollar Exchange Rate Under Threat From RBA

The AUSTRALIAN DOLLAR (currency:AUD) performed with credit yesterday, losing less ground against Sterling than most of the other major global tenders.

The Aussie was bolstered by the latest Gross Domestic Product data from China, published during Tuesday’s Asian session.

The keynote release showed that economic activity in the world’s second largest economy had outstripped expectations during the final three months of last year.

The news came as music to the ears of Australia’s exporters and the Aussie outperformed on the day as a consequence.

However, the Australian unit’s recent gains could be given up in an instant if the Reserve Bank of Australia hints that it is countenancing an interest rate cut. The outlook for the Aussie is NEUTRAL TO NEGATIVE and the GBP AUD exchange rate is currently sitting at 1.8540.

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