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Pound Sterling GBP Exchange Rate Forecast vs USD CAD - Another Limited UK Data Week Incoming

May 26, 2016 - Written by Tim Boyer

Next week may be something of a repeat of the current one for the Pound, given that most of the notable UK data isn't spread evenly across the week.

The early-afternoon tomorrow may send the US Dollar soaring, if the Q1 annualised GDP result rises as expected. This is on account of the assumption that such an outcome will go a long way to increasing the odds of a US interest rate hike taking place in June.

Sliding Brexit Bets Send the GBP Exchange Rate Soaring



The POUND STERLING (currency : GBP) has enjoyed its best week this year as investors price-in a higher percentage chance that the UK will vote to ‘Remain’ in the European Union on 23rd June. Last week’s IPSOS Mori opinion poll set the ball rolling, suggesting that ‘Remain’ holds a 55 plays 37 lead over ‘Leave’. However, cynics point out that the poll sample size was extremely small and that anything can happen in a two horse race. The outlook for Sterling is NEUTRAL TO POSITIVE.

USD Exchange Rate Outlook Neutral/Positive with Fed Rate Speculation Driving Sentiment



The US DOLLAR (currency : USD) has suffered some selling pressure in the currency markets during recent sessions. The mixed nature of recent data releases from the States has caused market participants to scale back their expectations of an interest rate hike from the Federal Reserve next month – the money markets now price-in only a 28% likelihood of a rise. However, the same futures markets imply that there is a 10% chance that the Fed will increase rates by a full 50 basis points in July. The mere chance of such a move is forecast to support the Buck in the near-term – the Dollar is therefore forecast to trade on a NEUTRAL TO POSITIVE footing into the medium term. The GBP USD exchange rate stands at 1.4682.

Oil Price Shifts Impact Canadian Dollar Currency Trading



Yesterday afternoon’s weekly US Oil inventory data showed a far higher than anticipated decline in American oil stocks. The news helped to send the price of a barrel of Crude Oil up through the $50 threshold for the first time this year and the CANADIAN DOLLAR (currency : CAD) enjoyed a boost as a consequence. Tomorrow afternoon’s US Gross Domestic Product data is the next risk event of note for the Loonie which is now forecast to trade on a NEUTRAL TO POSITIVE footing moving forward. The GBP CAD exchange rate stands at 1.9026.

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