British Pound Sterling Forecast: Gains against USD EUR AUD Predicted?

July 29, 2015 - Written by John Cameron

STORY LINK British Pound Sterling Forecast: Gains against USD EUR AUD Predicted?

RBA Rate Cut Bets Leave GBP/AUD Trending at Six-Year High

Although the Chinese government took steps to stabilize the local stock market yesterday, speculation that the Reserve Bank of Australia intends to cut borrowing costs further in the near future kept the GBP/AUD exchange rate trending close to a six-year high.

Earlier...

The POUND STERLING (currency:GBP) floundered against the other sixteen most actively traded global currencies during the final 48hrs of last week’s session as investors continued to factor in Thursday morning’s disappointing domestic shop sales figures. However, analysts forecast that this week could be a different story for the UK unit. Tomorrow morning’s domestic GDP data is expected to point to a continuation in the British economic recovery and the Pound is expected to trade with a NEUTRAL TO POSITIVE bias moving forward.


Last Friday’s news that the pace of US home purchases had slumped to its lowest level for some seven months held back the US DOLLAR (currency:USD) during the final trading hours of last week. However, many analysts forecast that the Federal Reserve will drop heavy hints on Wednesday that it will be hiking its key lending rate before the year is out. The outlook for the Buck therefore remains NEUTRAL TO POSITIVE and the Pound Sterling US Dollar exchange rate stands at 1.5510.

Investors holding EURO (currency:EUR) assets will have to wait until the final session of this week for the major data release from the euroland. The July Consumer Price Index inflation numbers are likely to show that the rate of price rises in the single currency area remained at rock bottom levels. Such a result will increase market speculation that the European Central Bank (ECB) will maintain its €65bn per calendar month past next Autumn. The continuing potential for a Greek debt meltdown and the threat that the ECB will prolong its bond-buying programme are forecast to see the shared currency perform on a NEGATIVE footing moving forward. GBP EUR stands at 1.4140.

The AUSTRALIAN DOLLAR (currency:AUD) endured a torrid finale to last week, sending the GBP AUD exchange rate Northwards to a fresh 6 ½ year high of 2.1338. The Aussie unit continues to act as a liquid proxy for the less tradable Chinese Yuan, so fears of a continued slowdown in economic activity in the world’s second largest economy continue to hit it hard. The lingering suspicion that the Reserve Bank of Australia will follow the footsteps of the Reserve Bank of New Zealand and cut its headline interest rate are forecast to weigh down the Aussie moving forward. The outlook for the Aussie is NEUTRAL TO NEGATIVE and GBP AUD stands at 2.1315.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts