British Pound Sterling FX Forecast vs EUR USD AUD

April 23, 2015 - Written by John Cameron

STORY LINK British Pound Sterling FX Forecast vs EUR USD AUD

The Pound Sterling (currency:GBP) enjoyed considerable support throughout yesterday’s session following the publication of a distinctly hawkish set of Bank of England minutes. The UK central bank remains relatively go-ahead on interest rate increases in spite of domestic ‘noflation’. However, the British unit’s prospects continue to be hampered by the upcoming UK General Election. The outlook for Sterling is NEUTRAL.

Investors continue to fear the worst for the EURO (currency:EUR). Yesterday’s weak euroland Consumer Confidence survey suggests that the initial optimism engendered by the European Central Bank’s Quantitative Easing programme is beginning to run out. Meanwhile, many commentators feel that Greece’s hard-line left-wing leadership may show its true colours at tomorrow’s meeting with the eurogroup of Finance Ministers in Riga. Analysts continue to forecast that the shared currency will perform with a NEGATIVE bias moving forward. The GBP EUR exchange rate stands at 1.4010.

The US DOLLAR (currency:USD) initially weakened against the Pound during yesterday’s session. However, afternoon trading in Europe brought the publication of a brace of US data releases which helped the Greenback. Strong domestic Mortgage Application numbers and an encouraging set of Existing Home Sales data are likely to cause market participants to price-in a higher chance of a US Federal Reserve interest rate hike sooner rather than later. The forecast for the Buck is therefore NEUTRAL TO POSITIVE. GBP USD trades at 1.5030.

Yesterday morning’s Australian Consumer Price Index data printed at a year-on-year 1.3% as per expectations. Even though the ‘trimmed mean’ version of the figure came out at slightly above its expected level, the Australian Dollar (currency:AUD) still gave up ground against the Pound Sterling on the day as investors’ price in the drop in the pace of Aussie price increases. Bad news from the Greece / eurogroup meetings in Riga, Latvia today, would pile further pressure on the Aussie. The outlook for the Australian unit is now NEUTRAL TO NEGATIVE and the GBP AUD exchange rate stands at 1.9360.

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