British Pound Sterling - Australian Dollar GBP AUD FX Forecast & Outlook EUR USD

August 24, 2015 - Written by John Cameron

STORY LINK British Pound Sterling - Australian Dollar GBP AUD FX Forecast & Outlook EUR USD

Black Monday Drama Impacts GBP, EUR, USD, AUD Exchange Rate Movement

While the Euro gained across the board as a result of the Black Monday market shifts, the US Dollar softened amid bets the turmoil in China will delay a revision of borrowing costs. The Pound put on a mixed performance, falling against the Euro but advancing on its commodity-driven counterparts, while the Australian Dollar plummeted to fresh lows.

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Currency Market Volatility Caused by Stock Shifts & Commodity Prices: British Pound Exchange Rate Neutral

Wild plunges for global stock markets and another week of hefty losses for wholesale commodity prices have caused investors to amend their expectations regarding the future performance of various leading currencies. Our head of analysis makes his predictions for the future performance of four leading tenders below -

The value of the POUND STERLING (currency : GBP) remains relatively resilient to changes in the price of raw materials and with UK interest rates remaining at a record low of 0.5%, Sterling retains its status as a low-yielding tender. This means that the UK unit should remain impervious to any further drop in global stocks; however, Friday morning’s local Gross Domestic Product data has the potential to derail Sterling’s recent progress.

In the meantime the UK unit is forecast to trade on a NEUTRAL TO POSITIVE footing.

Pound Sterling to Australian Dollar Trending Close to Best Conversion Rate

The AUSTRALIAN DOLLAR (currency : AUD) has a big problem in the shape of China and this problem is unlikely to ease any time soon. The Aussie continues to act a proxy currency for the less-tradable Chinese Yuan thanks to the fact that China remains the number one destination for Australia’s plentiful exports. Economists estimate that the actual current level of Chinese GDP might be several percentage points below the official 7.0% posited by the nation’s authorities.

For this reason, the outlook for the Aussie is NEUTRAL TO NEGATIVE and GBP AUD stands at 2.1490.

Euro Best Performing Currency as Greek Crisis Concerns Fade

The EURO (currency : EUR) outperformed almost all of the other sixteen most actively traded global currencies during Friday’s session. The shared currency benefited from a mini-relief rally at last week’s confirmation that Greece’s third bailout had been rubber-stamped by the Athens parliament. With more emergency financing to Greece on tap for years to come, the political shenanigans which followed matter little. A better than expected set of German inflation numbers on Friday would provide the euroland unit with further forward momentum, but with the European Central Bank’s Quantitative Easing programme continuing in the background, the forecast for the euro remains NEGATIVE. The Pound euro exchange rate stands at 1.3810.

US Dollar on the Downtrend amid Fed Rate Hike Expectations

The US DOLLAR (currency : USD) endured a poor ending to last week’s session. The sharp drop in oil prices and increased fears regarding China’s economy caused investors to downgrade their expectations regarding a Federal Reserve interest rate hike this side of Christmas. Data highlights from the States this week include tomorrow’s Consumer Confidence survey, Wednesday’s Durable Goods Orders figures and Thursday’s US GDP numbers.

The outlook for the Buck is NEUTRAL and the Pound Sterling US Dollar exchange rate stands at 1.5710.

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TAGS: Australian Dollar Forecasts Currency Predictions Euro Poun Forecasts