May 13, 2015 - Written by John Cameron
STORY LINK Exchange Rate Forecasts: Pound, Euro, US Dollar, South African Rand
The POUND STERLING (currency:GBP) lost ground against most of the other sixteen most actively traded global currencies during yesterday’s session. The positive lustre afforded the Pound during the immediate aftermath of last Thursday’s UK General Election appears to be waning as investors concentrate instead on the possible outcome of the EU In / Out Referendum, likely to be held next year. A UK exit from the European Union would slash up to 10% off Britain’s GDP and the Pound would be likely to plunge as a result. The outlook for the UK unit is now NEUTRAL TO NEGATIVE.
The EURO (currency:EUR) lurched one way and then the other yesterday. Initially, the shared currency struggled as investors priced-in Greek Finance Minister Yanis Varoufakis’s assertion of the previous evening that his debt-riddled nation will run out of funds ‘within two weeks’. However, the euroland unit staged a concerted comeback during the middle part of the day as market participants expressed their relief that Athens had made its latest interest payment to the IMF. The forecast for the single currency remains NEGATIVE and GBP EUR stands at 1.3955.
The US DOLLAR (currency:USD) continued to struggle against the Pound yesterday, with the GBP USD exchange rate briefly breaking above the 1.5700 threshold. Investors have been quick to price-in a much lower likelihood that the Federal Reserve will be hiking interest rates this year following the weaker American jobs data of the past couple of months. However, these expectations of a delayed hike may have been overcooked, with US labour market numbers expected to sharply improve before the end of Summer. The outlook for the Buck is now NEUTRAL TO POSITIVE and GBP USD stands at 1.5705.
The Pound Sterling SOUTH AFRICAN RAND (currency:ZAR) exchange rate breached the 19.0000 threshold for the first time in several decades during yesterday’s trading session. The revelation that South Africa’s government has spent a stunning ZAR1 trillion on infrastructure projects since 2010 and still the Sub-Saharan nation is suffering widespread power outages. The prospects for the Rand appear NEUTRAL TO NEGATIVE and the Pound Rand exchange rate currently sits at 18.8895.
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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts