Pound Sterling Forecast - Exchange Rate Predictions for GBP to Euro, Aussie Dollar and US Dollar

February 16, 2015 - Written by John Cameron

STORY LINK Pound Sterling Forecast - Exchange Rate Predictions for GBP to Euro, Aussie Dollar and US Dollar

Latest Pound Sterling Forecast Hinges on Tuesday's Inflation Data

The POUND STERLING (currency:GBP) had a steady week last week, but the relatively strong performance from the UK unit will be put to the test by tomorrow’s domestic inflation numbers.

Bank of England Governor Mark Carney gave a heads-up for the data last week, when he forecast that the pace of British price rises would drop below zero sooner rather than later.

If the January inflation numbers show at or below zero, then expect the Pound to endure renewed selling pressure.

Analysts forecast that the Pound will perform on a NEUTRAL TO POSITIVE footing in the short term.

Australian Dollar Exchange Rate Forecast Hindered by Jobs Numbers

The AUSTRALIAN DOLLAR (currency:AUD) plunged to its lowest level against the Pound Sterling since 2009 during the latter part of last week’s session.

A disappointing set of Aussie jobs numbers piled the pressure on the Australian unit, but this week could be a more positive one for the Aussie.

If today brings the announcement of an agreement between the European Union and Greece on re-jigging its bailout terms, then risk sentiment and the Aussie are both likely to spiral.

The outlook for the Aussie is now NEUTRAL and GBP/AUD exchange rate stands at 1.98126.

Euro Forecast Still Negative

The EURO (currency:EUR) slumped to its lowest level for 7 ½ years during trading last week.

Wednesday’s failure by the eurogroup to reach a debt deal with Athens continues to weigh heavily on the single currency.

However, the two parties reconvene today and a positive announcement has largely been factored into current pricing on the single currency.

Meanwhile, whatever happens today, the European Central Bank will be embarking upon a €1.1tn Quantitative Easing programme next month, so the forecast for the euro remains fervently NEGATIVE.

The GBP/EUR exchange rate stands at 1.35104.

US Dollar Exchange Rate Forecats: USD Support Ebbs

The tide appears to have turned against the US DOLLAR (currency:USD) since the turn of the year.

With the price of a barrel of crude oil remaining close to the bottom of its multi-year range and with the real threat of a pronounced slowdown in the Eurozone persisting, there is less pressure on the US Federal Reserve to countenance an interest rate hike than was the case during Q4 2014.

We will learn more about the Fed’s intentions on Wednesday evening when the minutes of its January policy meeting are made public.

The Buck is expected to trade on a NEUTRAL footing for the remainder of this week and GBP/USD exchange rate stands at 1.54133.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts