Gains Forecast for GBP EUR Exchange Rate, Loses Expected for EUR USD

May 26, 2015 - Written by John Cameron

STORY LINK Gains Forecast for GBP EUR Exchange Rate, Loses Expected for EUR USD

Headline-grabbing comments from major global figures since the London session ended on Friday afternoon are forecast to alter the relative value of several leading currencies during this week’s session.

Friday night’s words from the most powerful woman in global finance were hotly anticipated following the publication of higher than anticipated US inflation figures a few hours before. Federal Reserve Chair Janet Yellen’s set piece speech in Providence, the capital of the tiny state of Rhode Island, was notable for her assertion that she expects America to start increasing its headline interest rate ‘at some point this year’. The chief US central banker acknowledged that the early part of 2015 had seen an unexpectedly poor performance from the world’s premier economy, but went on to suggest that, providing her local economy showed the anticipated uptick during the second half of this year, then a tightening of policy will begin this side of Christmas.

As a result, the US Dollar (currency:USD) climbed across the board during light volume trading on Monday, which was a public holiday across much of the Western world. The move saw the Euro US Dollar exchange rate settle below the 1.1000 EUR USD threshold and many analysts now predict that the pair will track down towards it’s medium-term target of parity which it appeared to be heading towards until the weak omestic Q1 Gross Domestic Product figures were published last month.

The downward shift for EUR USD on the day was augmented by troubling comments from Greek Interior Minister Nikos Voutsis over the weekend. The Athens policymaker bluntly informed a Greek television interviewer that his nation does not have sufficient funds to make the next in a series of debt repayments totalling €1.6bn due to the International Monetary Fund next month. The June 5th payment now appears completely contingent upon Greece reaching a new bailout arrangement with the EU / ECB / IMF ‘Troika’ within the next ten days. The Pound Sterling euro exchange rate shot back up into the 1.4100s on Monday in anticipation that such an arrangement will prove difficult to reach.

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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts