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

April 6, 2011 - Written by John Cameron

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

POUND STERLING

The Pound has been brought back down to earth with a bang today following yesterday’s positive Service Sector data. This morning’s Manufacturing Production data for February came out significantly worse than expectations, causing significant selling pressure on Sterling. Tomorrow’s Bank of England rate decision is unlikely to provide any respite. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6309

The Dollar has lost significant ground against the Euro and most other majors today. EUR/USD has reached a new 15 month high as the Dollar continues to suffer from top-of-the-range oil prices and continuing dovish commentary from the Federal Reserve. NEAR-TERM OUTLOOK – NEUTRAL.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1377

The Euro has enjoyed a day of gains ahead of tomorrow’s ECB Interest Rate Announcement. It will be a massive surprise if the ECB does not elect to raise interest rates tomorrow, however it is likely that the raise will be by only 25bps. There have been market rumours over the last week that a 50bps raise is possible, but this looks unlikely given yesterday’s Eurozone Retail Sales figures. A hike of only 25bps may even cause the Euro to weaken. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5650

Surging risk sentiment in global markets has once again caused the Australian Dollar to strengthen due to its position as a high-yielder. The continuing forward movement in commodities prices has also benefitted the Aussie in its role as an exporter of raw materials. An ECB rate-rise would see Australia’s relative interest rate advantage slip, causing some potential for downside. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0959

In the absence of any tier one data in New Zealand today, the Kiwi was left open to swings in risk sentiment. This caused it to trade across a wide range against the majors, (e.g. the daily range on GBP/NZD was 2.0912 – 2.1233). Expect further swings in the Kiwi’s value over the next 24 hours as the markets wait for the next New Zealand risk event. NEAR-TERM OUTLOOK – NEUTRAL.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5639

The CAD remained close to the top of its recent trading range against the Greenback during today’s session, as it continued to benefit from the commodities rally. This afternoon’s Ivey Purchasing Managers Index for March far outstripped expectations, providing further support for the Canadian Dollar. Friday’s key Canadian employment data will go a long way to determining future interest rate expectations for the Canadian Central Bank. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVIVE

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Canadian Dolla Forecasts