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Pound Sterling FX Exchange Rate Forecast vs USD EUR JPY

July 28, 2016 - Written by John Cameron

Negative Outlook for Pound Sterling (GBP) Remains on Weak UK Data



The POUND STERLING (currency : GBP) failed to record any tangible gains following yesterday’s better than anticipated UK GDP data for the three months up until the end of June. Investors instead focussed on the alarming Flash PMI survey released a few days ago which pointed to the lowest level of activity in the domestic economy since 2009, sending the Pound down by 1% against the euro today. The outlook for Sterling remains NEGATIVE.

Euro (EUR) Exchange Rate Forecast to Trend on Neutral-Negative Footing



The EURO (currency : EUR) has bullied the Pound during today’s session, sending the GBP EUR exchange rate down to as low as 1.1825 earlier on. The single currency was assisted by the publication of a stronger than anticipated set of German employment change figures, out earlier. Investors continue to believe that if the German economy outperforms, the euro will be OK. The shared currency is forecast to trade on a NEUTRAL TO POSITIVE footing moving forward.

GBP USD Exchange Rate Neutral on Fed and BoE Interest Rate Concerns



The US DOLLAR (currency : USD) has struggled to assert itself against the other sixteen most actively traded global currencies so far today. The Buck has stuttered in the currency markets since last night’s announcement from the US Federal Reserve that it was maintaining its headline interest rate at its current banding of between 0.25% and 0.50%. The Fed’s ‘wait and see’ stance on domestic US monetary policy has cooled investors’ expectations regarding an American rate hike this side of Christmas, making the outlook for the Greenback NEUTRAL. The GBP USD exchange rate stands at 1.3131.

BoJ Announcement Ahead - Japanese Yen (JPY) Exchange Rate Volatility Expected



The JAPANESE YEN (currency : JPY) has staged a dramatic Bull Run in the markets during recent months, briefly sending the benchmark USD JPY exchange rate down through the psychologically significant 100.000 threshold. However, if analysts are correct, the Yen’s outperformance could be about to end – Friday morning’s Bank of Japan monetary policy announcement is expected to see an increase of almost $300 bn in the nation’s already massive Quantitative Easing programme. The Yen forecast is NEGATIVE and the GBP JPY exchange rate stands at 137.720.

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