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

February 1, 2015 - Written by John Cameron

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

Friday's foreign exchange rate markets witnessed a day of major risk events from some of the world’s premier economies and the upshot has seen movement for leading global currency pairs.

Analysts forecast that there could be more pronounced price action to come next week.

North American GDP Data Disappoint

Friday afternoon’s North American data added to the impression that all is not well with the global economy and that the near-term recovery is faltering.

A brace of growth numbers from the USA and Canada printed at below their expected levels; Canada’s GDP data for the twelve months to the end of November revealed that the overall level of activity in the Canadian economy dipped from 2.3% the previous month to a relative lowly 1.9%.

The latest American figures, published at the same time, showed an even more pronounced downward spike in GDP growth, from 5.0% in Q3 2014 to 2.6% in Q4 2014.

Updated Pound Exchange Rates Today - 02/02/2015

The Pound to Australian Dollar exchange rate today is converting -0.71 per cent lower at 1.92513 GBP/AUD.
The Pound to Canadian Dollar exchange rate is -1.22 pct lower with a conversion rate of 1 GBP equals 1.89090 CAD.
The Pound to Swiss Franc exchange rate is +0.3 pct higher with a conversion rate of 1 GBP equals 1.39396 CHF.
The Pound to Euro exchange rate today is converting -0.66 per cent lower at 1.32523 GBP/EUR.
The Pound to New Zealand Dollar exchange rate converts -0.98 per cent lower at 1 GBP is 2.05641 NZD.
The Pound to US Dollar exchange rate converts -0.39 per cent lower at 1 GBP is 1.50260 USD.

US Dollar Exchange Rate Gains From Safe Haven Support

The fall-out saw the US Dollar (currency:USD) hoover up safe haven support as investors priced-in a high likelihood that 2015 will bring another year of economic underperformance from the world financial system. Meanwhile, the Sterling Canadian Dollar exchange rate tracked Northwards in response to the Canadian numbers, sending the GBP CAD exchange rate up to an intraday high of 1.9276.

Deflation Threat to Eurozone

Two other major events of the day took place on the other side of the Atlantic.

Friday morning’s whole of eurozone inflation data suggested that the European Central Bank’s nightmare scenario of entrenched deflation is starting to become a realistic possibility.

The latest Consumer Price Index figures revealed a year-on-year drop of 0.6% during the twelve month to the end of December.

Economists forecast that, notwithstanding the ECB’s large scale Quantitative Easing programme, which commences in March, the euro area could be heady for a difficult period. A downward move for the euro is forecast.

Australian and NZ Dollar Exchange Rates Supported as Russia Cuts Interest Rates

Meanwhile, the announcement by the Bank of Russia that it was cutting its key interest rate from 17.0% down to 15.0% triggered a brief bout of support for the high-yielding Commodity Dollars.

However, the move proved ephemeral and the Pound Sterling was pushing higher against the Australian and New Zealand Dollars (currency:AUD) (currency:NZD) once more by the later part of the European trading session.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Canadian Dolla Forecasts