Long-Term Exchange Rate Forecasts for British Pound, Australian Dollar, NZ and Canadian Dollars

August 26, 2016 - Written by Ben Hughes

STORY LINK Long-Term Exchange Rate Forecasts for British Pound, Australian Dollar, NZ and Canadian Dollars

What Key Foreign Exchange Market Indicators Impact Pound, Australian Dollar, New Zealand Dollar and Canadian Dollar Exchange Rate Trading?

• The Pound to Australian Dollar exchange rate is 1 GBP equals 1.73699 AUD.
• The Pound to Canadian Dollar exchange rate converts at 1 GBP is 1.70829 CAD.
• The Pound to Euro conversion rate is 1.17323 GBP/EUR.
• The Pound to New Zealand Dollar conversion rate is 1.81439 GBP/NZD.
• The Pound to US Dollar exchange rate is 1 GBP equals 1.31357 USD.

When considering how the Pound will trade against the Australian Dollar, New Zealand Dollar and Canadian Dollar exchange rates on today's foreign exchange markets, it's important to bear in mind key market indicators.

Every trading day brings a raft of fresh data releases in the global currency markets and each of these has the potential to prove market-moving for the world’s leading currency pairs. Sometimes it’s easy for investors to succumb to flavour blur; our leading data analysts tries to decipher the wood from the trees by taking a look at the key leading indicators that matter below…

$VIX Indicates that Australian Dollar (AUD), New Zealand Dollar (NZD) Could Decline

Market-watchers always pay close attention to this metric which measures levels of fear amongst equities investors in the world’s premier economy. $VIX gauges the number of protective ‘put’ options placed by equities traders in Chicago on the deals which they strike and a high reading suggests increased nervousness.

VIX spiked to a fresh near-term high at above the 26.00 level in the aftermath of June’s vote in favour of Brexit in the UK. However, the intervening period has seen the key indicator settle back down below 15.00. Some analysts take a prolonged period of low VIX readings as a sign that a market ‘shock’ is on its way – such an outcome would see markets move against the high-yielding Commodity Dollars, meaning that both the Pound Sterling Australian Dollar exchange rate and Pound Sterling New Zealand Dollar forecasts would improve.

FOMC Expectations Forecast to Drive GBP to AUD, NZD, CAD Exchange Rates Higher

Analysts’ expectations regarding the likely future policy path of the US Federal Reserve’s rate-setters is key for several risk-driven currencies and for the US Dollar (currency : USD). Any suggestion that an increase in US interest rates is close at hand favours the Greenback and will hold back the export-driven Canadian Dollar, Australian Dollar and New Zealand Dollar alike.

The next monetary policy announcement from America’s central bank comes on 21st September and futures markets point to a 24% implied chance that the FOMC will opt to hike US interest rates at this meeting. Such a move is forecast to send the Pound Dollar exchange rate sharply lower while the GBP CAD, GBP AUD and GBP NZD exchange rates would spike higher.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts