Pound Sterling Exchange Rate Forecast vs Euro, US Dollar, Swiss Franc

May 21, 2015 - Written by John Cameron

STORY LINK Pound Sterling Exchange Rate Forecast vs Euro, US Dollar, Swiss Franc

The POUND STERLING (currency:GBP) continues to bask in the sunlight of the surprise clear-cut election victory from the Conservatives on May 7th. Last week’s domestic CPI inflation data, which revealed that for the first time since 1960, British prices are dropping has failed to hinder the Pound’s progress thanks to Bank of England Governor Mark Carney’s assertion that the pace of price rises will increase to 2.0% sooner rather than later. Analysts forecast that Sterling will perform on a NEUTRAL TO POSITIVE footing moving forward.

The EURO (currency:EUR) has been heavily downsold during the past 48hrs. The shared currency has suffered from the revelation in a speech from a senior European Central Bank policy maker that this month and next will see increased bond purchases as part of the euroland reserve bank Quantitative Easing programme. Meanwhile, Greece’s debt problems fail to abate. The outlook for the euro remains firmly NEGATIVE and the GBP EUR exchange rate stands at 1.4010.

The tide looks to have turned for the US DOLLAR (currency:USD). The Buck suffered a dismal April as investors priced-in significantly weaker US data, particularly from the nation’s jobs market. However, Tuesday’s strong American building sector numbers and yesterday’s improved US Mortgage Approval figures have helped the Greenback. If tomorrow’s domestic inflation figures beat expectations, then look for the Buck to trade with a NEUTRAL TO POSITIVE bias moving forward. The GBP USD exchange rate sits at 1.5531.

The SWISS FRANC (currency:CHF) has performed solidly over the past 24hrs in the global currency markets. However, suspicions persist that with Swiss interest rates at -0.75%, the Franc is only doing as well as it is thanks to its safe haven function. Take away nagging fears that Greece may be set to partially default on its international debt commitments and the Swiss unit will weaken. Yesterday’s ZEW survey of the Swiss economy was bad, but not as bad as the previous month’s, however the Franc is predicted to trade with a NEUTRAL TO NEGATIVE bias moving forward. GBP CHF stands at 1.4541.

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