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British Pound Sterling Exchange Rate Forecast Versus Euro, US Dollar, Australian Dollar EUR USD AUD

March 30, 2015 - Written by John Cameron

The POUND STERLING (currency:GBP) has strengthened across the board since the middle part of last week as investors price-in comments in the last four days from Bank of England Governor Mark Carney and his Deputy Ben Broadbent. The suggestion from these leading UK policymakers that the next domestic monetary policy move is still very likely to be an interest rate increase has helped Sterling. However, tomorrow morning’s UK Gross Domestic Product number could de-rail the Pound’s near-term stabilisation. The UK unit is forecast to trade with a NEUTRAL bias in the short-term.

The European Central Bank’s Quantitative Easing programme appears to be having its desired effect in increasing confidence amongst European economic participants and the EURO (currency:EUR) is benefitting. This morning’s whole of eurozone Consumer Confidence data beat expectations, helping the single currency, but investors holding the shared currency should remain wary of tomorrow afternoon’s eurozone inflation numbers which are likely to point to a move into deeper deflation for the euro territory. The outlook for the single currency remains NEGATIVE and GBP EUR trades at 1.3640.

The US DOLLAR (currency:USD) has powered ahead against the sixteen other most actively traded global currencies during early trading this week. The Buck is climbing ahead of Friday’s US labour market data, which takes on added significance following the Federal Reserve’s assertion that a ‘further improvement’ in US jobs numbers will be required for an interest rate hike to be effected. With another strong showing anticipated, the outlook for the Greenback is NEUTRAL TO POSTIVE, while the GBP USD exchange rate stands at 1.4795.

The AUSTRALIAN DOLLAR (currency:AUD) has endured a torrid session in the global currency markets today, dropping almost 1% against a timid Pound Sterling. The Aussie continues to be weighed down by expectations that the Reserve Bank of Australia will cut its already record-low interest rate at least twice before Christmas, while concerns regarding a Greek exit from the eurozone make market participants reluctant to hold the risk-driven Commodity Dollars in general. The continued poor performance for global commodity prices ensures that the Aussie is forecast to perform on a NEUTRAL TO NEGATIVE footing into the medium term. The GBP AUD exchange rate stands at 1.9314.
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