Exchange Rate Forecast for Pound Sterling, Euro and New Zealand Dollar

January 28, 2015 - Written by John Cameron

STORY LINK Exchange Rate Forecast for Pound Sterling, Euro and New Zealand Dollar

Analysts forecast that the Pound Sterling’s near-term fortunes against the US Dollar (currency:USD) and New Zealand Dollar (currency:NZD) are dependent on two central bank monetary policy decisions due out over the next few hours.

The US Federal Reserve leads the way with its latest policy announcement in a very short time. The Fed’s Quantitative Easing programme was completely tapered out in October, and economists predict that an interest rate hike from the world’s premier central bank is highly unlikely this month given the recent fall in global oil prices.

However, the accompanying statement and press conference from Fed Chair Janet Yellen, which follows is highly likely to provoke market movement. The Pound Sterling has recorded decent gains against the Greenback during this week’s trading as investors factored-in a lower percentage chance that the Fed will be tightening its monetary policy before the end of the year. If Yellen’s words back up this belief, then analysts expect that the Buck will give up further ground against the other major global currencies. For this reason. The Dollar is forecast to trade with a NEUTRAL TO NEGATIVE bias moving forward and GBP USD stands at 1.5180.

Meanwhile, the Reserve Bank of New Zealand (RBNZ) announces its latest policy decision an hour after the US Federal Reserve. The consensus expectation amongst economists is that New Zealand’s central bank will opt to maintain its key lending rate at its current level of 3.50%. However, given the similarities between the economies of New Zealand and Canada, and given that the Bank of Canada caught investors on the back foot with a surprise interest rate cut last week, it would not be a bolt out of the blue if the RBNZ opted to trim rates. The market has partially factored this in during recent sessions, sending the GBP NZD exchange rate up towards the middle part of the 2.0000 – 2.1000 range. The pair has briefly traded at above the 2.1000 level during recent months – a surprise cut from the RBNZ would send the pair back up towards these levels once more, so the outlook for the New Zealand Dollar is also NEUTRAL TO NEGATIVE. GBP NZD stands at 2.0340.

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: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts