Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD, CAD

April 5, 2011 - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD, CAD

POUND STERLING

Sterling has had its best day for some time today following some extremely positive Service Sector data this morning. Tomorrow’s NIESR GDP figure will be extremely closely-watched by analysts – if it confirms that the UK economy has returned to growth in Q1 of 2011, then expect further upside for Sterling. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6293

The Dollar continues to weaken following last Friday’s positive labour market data. However, Fed Chairman Ben Bernanke commented last night that rising domestic prices in the US need to be watched ‘extremely closely’ have raised expectations of a tightening of US monetary policy before mid-summer. NEAR-TERM OUTLOOK – NEUTRAL.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1446

The Euro came under sustained selling pressure during the morning session following the release of worse-than-expected Eurozone Retail Sales figures for February. These figures showed that European shop sales are shrinking and has caused market participants to downgrade their ECB interest rate expectations. A 25bps hike by the ECB is likely to be fully factored-in to Euro prices. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5756

The worst trade figures since the start of 2010 have caused a day of losses for the Aussie today. Analysts believe that the February Trade Deficit of AUD205m has been caused by the recent bout of Australian Dollar strength. The RBA kept interest rates on hold in the early hours of this morning. Given the trade numbers, they had little option. Has the Aussie gone as far as it is going to go in the short term? NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.1168

New Zealand Finance Minister, Bill English, commented overnight that the RBNZ will not need to cut interest rates any further following the Christchurch earthquake. English believes that business confidence will quickly pick up following its recent dip. The Kiwi Dollar picked up some support earlier in the day following a flow of funds out of the Aussie, however this appeared to be a short-term phenomenon. NEAR-TERM OUTLOOK – NEUTRAL.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5708

The Canadian Dollar has held steady on the day. Oil prices continue to edge higher, which is supportive for the CAD. However, this has been off-set by a surprise overnight interest rate hike by China’s Central Bank. This tightening of Chinese monetary policy risks slowing Chinese economic growth and reducing demand for oil in one of the world’s major oil-importing nations. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVIVE.

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