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Foreign Currency Predictions - USD, EUR, GBP, JPY, NOK, AUD, NZD, CAD, ZAR, CHF

February 9, 2011 - Written by John Cameron

US DOLLAR

Crude oil resumed its rally today following a downward blip yesterday on the back of a hike in Chinese interest rates. The US equities rally looks to have stalled today and little hope of an increase to interest rates. SHORT-TERM OUTLOOK – Neutral.


EURO

The ECB looks to be reaching a consensus on a bail-out fund to tackle distressed assets in struggling nation states. Improved sentiment towards Euro-denominated debts in general looks set to provide some support. SHORT-TERM OUTLOOK – Neutral to positive.


STERLING

The Pound looks susceptible to downward pressure with the Bank of England MPC expected to hold rates tomorrow. SHORT-TERM OUTLOOK – Neutral to negative.


JAPANESE YEN

Yen strength continues to be determined by risk sentiment in the markets. A poor session for Asian equities yesterday was followed by a weak performance for the Yen today. With the FTSE closing down and the Dow Jones down on the day, another poor session for Asian stocks is anticipated. SHORT-TERM OUTLOOK – Negative.


NORWEGIAN KRONE

Following comments yesterday from the Norwegian Finance Minister stating hinting that government spending will be curbed and a rate hike is unlikely in the near-term, the NOK could come under selling pressure in spite of rising oil prices. SHORT-TERM OUTLOOK – Neutral to Negative.


AUSTRALIAN DOLLAR

An interest rate hike from Australia’s major trading partner, China and further monetary policy tightening predicted for later in the year continues to weigh down the Aussie. Risk sentiment has ebbed in the last twenty four hour. SHORT-TERM OUTLOOK – Negative.


NEW ZEALAND DOLLAR

The Kiwi has suffered over the last two trading session on speculation of a double dip recession. Reduced risk sentiment looks likely to hurt the NZ Dollar further. SHORT-TERM OUTLOOK – Negative.


CANADIAN DOLLAR

Oil prices look likely to edge upwards towards trend resistance at $100 per barrel. The Canadian Dollar will continue to benefit. SHORT-TERM OUTLOOK – Positive.


SOUTH AFRICAN RAND

Along with other high-yielders, the Rand is expected to lose ground as risk sentiment drops off. Rumours persist that the South African policy-makers are actively seeking a weaker Rand. SHORT-TERM OUTLOOK – Negative.


SWISS FRANC

The Franc may pick up support as some investors shift assets out of Euro-denominated assets over sovereign debt fears. Some upside possible. SHORT-TERM OUTLOOK – Neutral to Positive.

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