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British Pound Sterling Exchange Rate Forecast vs EUR USD AUD

April 29, 2015 - Written by John Cameron

The POUND STERLING (currency:GBP) generally held its own during yesterday’s trading session in spite of a distinctly below-par set of UK Gross Domestic Product data. Quarterly growth of 0.3% in the domestic economy disappointed commentators, but still leaves the UK at the head of the G7 in terms of economic expansion. Next week’s British General Election remains a drag on the Pound and the outlook for Sterling is NEUTRAL TO NEGATIVE.

The EURO (currency:EUR) edged marginally higher against Sterling yesterday, but the small gain for the single currency was limited by the news that the Finnish Navy had launched depth charges in the Gulf of Helsinki aimed at deterred a suspected Russian submarine. The European Central Bank’s ongoing Quantitative Easing programme, in combination with Russia’s ongoing muscle-flexing and fears of a Grexit mean that the shard currency is expected to perform on a NEGATIVE footing. The GBP EUR exchange rate stands at 1.3960.

The US DOLLAR (currency:USD) endured a session from hell yesterday. The GBP USD exchange rate spiked to its highest level since the first week of March as market participants priced-in a lowly showing from the latest US Consumer Confidence survey. The data served to dissuade investors from the belief that US interest rates will be on the way up as soon as June. Tonight’s Fed policy announcement is likely to suggest that December is the most likely m month for a Fed rate hike. The outlook for the Buck is therefore NEUTRAL TO NEGATIVE and GBP SUD stands at 1.5310.

The AUSTRALIAN DOLLAR (currency:AUD) enjoyed a strong rally against the Pound Sterling yesterday. It didn’t take much to fuel the Aussie’s near-term improvement – Reserve Bank of Australia Governor Glenn Stevens’ failure to discuss monetary policy at a Sydney Symposium earlier this week was all it took. The markets have become accustomed to Australian policymakers jawboning their local tender lower, so Stevens’ omission was considered significant. A bounce in global iron ore prices has further assisted the Aussie. However, the move is likely to prove temporary and the outlook for the Aussie is NEUTRAL TO NEGATIVE. The GBP AUD exchange rate stands at 1.9220.
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