Euro FX Forecast vs British Pound Sterling GBP, US Dollar & Canadian Dollar

April 20, 2015 - Written by John Cameron

STORY LINK Euro FX Forecast vs British Pound Sterling GBP, US Dollar & Canadian Dollar

Much depends upon Greece’s submission of a suitable raft of economic reforms to her creditors by this Friday’s deadline. A failure by the hard-line left-wing Athens administration to do so would surely hasten an all-out Greek debt default, hitting the EURO (currency:EUR) for six. The improved tone of recent data releases from the euroland will not be enough to prop it up. The outlook for the euro remains firmly NEGATIVE and the GBP EUR exchange rate stands at 1.3844.

The POUND STERLING (currency:GBP) struck a duff note during the final stages of last week’s session. Concerns regarding the outcome of next month’s UK General Election weighed down Sterling on the day and are likely to continue to do so in the lead up to May 7th. According to the latest polls, the most likely outcome of the popular ballot will see the Scottish National Party propping up a minority Labour government via a fragile ‘confidence and supply’ arrangement. Expect the Pound to be the real loser in such a situation. The forecast for Sterling is therefore NEUTRAL TO NEGATIVE moving forward.

Friday afternoon’s American inflation data initially saw the US DOLLAR (currency:USD) strengthen against both the Pound and the euro. However, support for the Buck ebbed as the weekend market shutdown approached thanks to the decidedly mixed nature of the US price rise figures. A slight rise in the core rate of inflation was offset by an overall drop into deflation for American prices. Friday’s US Durable Goods Orders data represent the next tier one risk event for the Greenback. In the meantime, expect the Buck to trade on a NEUTRAL footing. GBP USD stands at 1.4960.

The CANADIAN DOLLAR (currency:CAD) enjoyed a surge of support following last Friday’s domestic inflation data. An above-expectations showing from the March Consumer Price Index figures helped the Loonie strengthen to its highest level in months against the other sixteen most actively traded global currencies. However, the Loonie may now have near-term peaked; analysts warn that a failure by Greece to meet its Friday deadline for presenting a set of reform to her creditors could trigger a massive flight to safety in the markets. The Canadian unit would lose out as a consequence, meaning that commentators now forecast that the near-term outlook for the Loonie is NEUTRAL TO NEGATIVE. GBP CAD stands at 1.8330.

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