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

April 12, 2011 - Written by John Cameron

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

POUND STERLING

UK CPI figures in at 4% this morning almost half a percent under the forecasted 4.4%.. The Pound responded dramatically against most of the world’s most actively traded currencies, declining as traders scaled back expectations for a rate hike from the Bank of England to Q3 or Q4 this year. Mervyn King the head of the Bank of England has previously made it quite clear that it is not their intention to alter monetary policy in the short term despite the acceleration in CPI at the start of the year.

The most recent inflation report predicted that inflation would fall back and this has proved to be correct. The heat has been taken off the MPC and the reaction in the currency markets has shown that traders are very bearish on the pound as a result. The pound has fallen from a high of 1.6347 to mid 1.62’s on the GBP/USD pairing due to the unexpected news and the GBP/EUR pair has reached an 8 month low currently trading at 1.1222.
NEAR-TERM OUTLOOK – NEGATIVE

US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6275

The US trade balance figures released at 1330 came in as expected showing a trade deficit of $45.8bn, the market didn’t really respond with any dramatic movement. It would seem the main driver of the US Dollar at the moment is still risk appetite. As geo-political uncertainties continue to clear the US Dollar seems to weaken and a retest of resistance above 1.64 looks likely before the end of the week.
NEAR-TERM OUTLOOK – USD NEGATIVE

EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1224

The Euro has gained ground today reaching a low point of 1.1222 against the pound and a high point of 1.4518 against the US Dollar. It is likely that the single currency will continue to benefit from it higher yield in the short term and we could now see a move towards support at 1.1180 or even at 1.0950. The ZEW index figures from Germany came in below expected at 7.6 from the expected 11.3, this represents a decline in the outlook for the German economy over the medium ter
NEAR-TERM OUTLOOK – POSITIVE

AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5535

There has been little movement in the Aussie Dollar today, the market is consolidating ahead consumer confidence figures tomorrow.
NEAR-TERM OUTLOOK – POSITIVE

NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0722

The New Zealand Dollar continues to trend towards strength, the market reached a low of 2.0680 before pulling back into the 2.07’s, the next key news release is tomorrow’s retail sales figures.
NEAR-TERM OUTLOOK –POSITIVE

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

The Canadian Dollar at the close is in the same position as yesterday despite the widely anticipated holding of the Canadian exchange rates. The CAD weakened initially following the rate decision and the suggestion that rates would need to remain low due to the adverse affects of the Canadian Dollar’s strength impacting on export growth. The Bank of Canada has raised its growth forecasts from 2.4% to 2.9% whilst noting that economic growth will peak in part way through 2012.
NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.

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