Exchange Rate Forecasts for Pound Sterling v Australian Dollar (AUD), New Zealand Dollar (NZD) & South African Rand (ZAR)

February 25, 2015 - Written by John Cameron

STORY LINK Exchange Rate Forecasts for Pound Sterling v Australian Dollar (AUD), New Zealand Dollar (NZD) & South African Rand (ZAR)

Chinese Data Beats Forecasts

Last night’s gauge of the level of manufacturing activity in the world’s second largest economy showed at a higher than expected level. Analysts had been expecting the Chinese data to show that output from this key sector of China’s economy had once again contracted, but the figures unexpectedly revealed that the level of activity in the Asian giant’s manufacturing sector is on the increase once more following a pronounced dip during the latter part of 2014.

PBoC Policy Loosening Working

Commentators have suggested that the looser monetary policy stance adopted by the People’s Bank of China in recent months has increased capital flows from the banks into China’s private sector companies, however Oliver Barron of North Square Blue Oak remains far from convinced; he stated earlier that, ‘the figure marginally expanded, but it’s not necessarily a sign of a stronger economy. The potential pickup is from a very weak January. We’re far from seeing a strong economic recovery.’

Greece Deal Calms Inventors’ Nerves

Yesterday’s news from the euroland that Greece had agreed a 4-month stay of execution from its creditors caused a pronounced downward movement in the level of the VIX ‘Fear Index’, which dropped to as low as $13.53 during late trading. This represented VIX’s lowest level since the first week of December. The key indicator had been to as high as $22.39 during the middle part of last month – the weeks which have followed have seen a fall of over 39.5% as investors regained their nerve. Last night’s Chinese data is likely to give VIX further downward momentum when the US markets re-open for business shortly.

Gains Forecast for Pound Sterling v AUD NZD ZAR

Analysts forecast that the improvement in global risk sentiment over the past 24hrs s likely to see the Pound Sterling fall back against the high-yielding Commodity Dollars. Expect near-term downside for the UK unit against the Australian Dollar (currency:AUD), New Zealand Dollar (currency:NZD) and the South African Rand (currency:ZAR).

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