British Pound Sterling Exchange Rate Forecast vs EUR USD AUD

May 6, 2015 - Written by John Cameron

STORY LINK British Pound Sterling Exchange Rate Forecast vs EUR USD AUD

The POUND STERLING (currency:GBP) was hit hard by yesterday’s UK Construction sector survey which showed the lowest level of activity for 22 months. Fears over the result of tomorrow’s British General Election continue to pose the main threat to the Pound, with many commentators forecasting that a ‘Coalition of Losers’ involving the second and third placed Labour and Liberal Democrats is the most probable outcome. Such a result is forecast to hit Sterling hard, meaning that the outlook for the UK unit is NEUTRAL TO NEGATIVE.

The EURO (currency:EUR) put in a steady performance yesterday with investors taking heart at the publication of an upgraded 2015 GDP growth forecast for the euroland. Greece’s policymakers made positive noises regarding the chances of a bail-out deal being reached with its creditors. However, until a comprehensive list of reforms is put forward by Athens, the European Union and International Monetary Fund will withhold Greece’s next €7.2bn tranche of emergency funding. The outlook for the shared currency remains NEGATIVE and the GBP EUR exchange rate sits at 1.3570.

Yesterday’s official figures showed that America’s trade deficit jumped to a heady $51.4bn in March and support for the US DOLLAR (currency:USD) slumped as a consequence. Analysts forecast that the result may see US GDP for Q1 revised downwards by as much as 0.7% - a move which would see investors flock to sell the Buck. The outlook for the Greenback is now NEUTRAL TO NEGATIVE and the GBP USD exchange rate stands at 1.5184.

The AUSTRALIAN DOLLAR (currency:AUD) confounded experts by strengthening during the immediate aftermath of yesterday’s Reserve Bank of Australia interest rate cut. The accompanying commentary from RBA supremo Glenn Stevens alluded to Sydney’s spiralling property prices and to stronger growth in the domestic jobs market – words which analysts took as a tacit admission that there’s no room remaining for any further trimming of rates. The risk-sensitive Aussie badly needs Greece to reach a debt deal with its creditors to gain further forward momentum, in the meantime the Australian tender is forecast to trade with a NEUTRAL bias. GBP AUD stands at 1.9113.

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