Exchange Rate Outlook Forecast For Major Currencies ? GBP, USD, EUR, AUD, NZD, CAD

March 21, 2011 - Written by John Cameron

STORY LINK Exchange Rate Outlook Forecast For Major Currencies ? GBP, USD, EUR, AUD, NZD, CAD

POUND STERLING

The Pound has picked up ground against all of the majors other than the high-yielders and the oil-driven currencies during today’s session. The Bank of England’s Chief Economist and MPC member Spencer Dale made bullish comments regarding the UK real economy’s prospects of recovery for the remainder of the year. Tomorrow’s CPI inflation figure is unlikely to hurt the Pound. Similarly, Wednesday’s BoE MPC Minutes and Budget may prove supportive. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6301

The Dollar has lost further ground on the day today as market sentiment has improved due to reduced fears of a nuclear disaster in Japan. Both GBP/USD and EUR/USD are trading close to key resistance levels, so any move higher could trigger a new up-trend. Equities markets have been steadied by G7 concerted currency market interventions at the end of last week, so further downside for the Greenback is possible. NEAR-TERM OUTLOOK – NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1478

ECB President commented today that he remained wary of the risk presented by rising prices in the Eurozone. He went on to re-iterate that the ECB’s role was to ensure price stability in the single economic area. With relatively few data releases of note in Europe this week, apart from Wednesday’s Eurozone Consumer Confidence survey, the Euro will be susceptible to technical trading. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.6225

A strong day for the Australian Dollar, as stock markets across the world staged a recovery following the G7 intervention at the end of last week. GBP/AUD fell by over 0.5% on the day as investors’ interest in higher-yielding assets was re-ignited. In common with other several other major economies, no tier one data releases are penne-in for Australia for the rest of the week, so movements in equities market will determine the Aussie’s levels. Beware of any escalation of the Libyan crisis, which could cause Aussie weakness. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.2223

Tonight’s New Zealand trade figures will be closely watched following a flat performance for the Kiwi today. Analysts need some evidence of some solid economic performance from the New Zealand Dollar in order to restore confidence. With the Kiwi barely counting as a high-yielder following recent rate cuts, the risk remains of a downside move. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5945

The Canadian Dollar gained ground in the early part of the day as oil prices spiked towards their recent 30-month high on Libyan worries. However, a lot of the early gains were given up by the CAD as safe haven funds were shifted out of Canada and into higher-yielding assets. Tomorrow’s Leading Indicators numbers for February and January retail Sales figures will be closely-watched with an eye on their possible impact on the future direction of Canadian Interest Rates . NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.

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