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

April 13, 2011 - Written by John Cameron

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

POUND STERLING

The pound has struggled to find much support in trade today, the sell off is however slowing and consolidation can be seen in some pairings as a result of the slightly better than expected unemployment figures released this morning. The UK jobs report was mixed, with an improvement seen in the unemployment rate falling to 7.8% from the expected 8%, yet the claimant count rose by 700 in February to 1.451 million for the month of March. Traders speculating on these figures are looking to determine whether the private sector can cover the 330,000 public sector jobs slashed as part of severe austerity set to reign in the UK’s spiralling budget deficit. The expectation is that the unemployment rate will rise gradually as the pain of the job cuts is felt in the coming months. The average earnings figures indicated a slump from 2.3% to 2%, this supports the recent CPI figures indicating inflation is slowing and wage growth is not a problem at the moment. As a result the MPC doves appear to be winning the argument for maintaining ultra accommodative policy in maintaining interest rates at record low levels to continue to support the anaemic UK economic recovery. NEAR-TERM OUTLOOK – NEGATIVE

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

The USD is trading in a similar position to yesterdays close, US Retails Sales came in +0.4% from the expected 0.5% figure. This had little impact on the market as traders to continue to focus more on other key drivers to the currency, these include risk appetite, its safe haven status and interest rate expectations for the future. The USD looks set to continue to weaken from here in the short term with a move towards 1.65 looking likely. NEAR-TERM OUTLOOK – USD NEGATIVE

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

The Euro’s streak of gains is continuing with near term support at 1.12 (GBP/EUR) holding for the time being. It is surprising how much the single currency is being supported on just higher interest rate expectations. There are many fundamental weaknesses that are clearly still visible in the Eurozone economies and the re-emergence of concerns over sovereign debt contagion is likely at some point. The expected timeframe of any recovery is the uncertainty. NEAR-TERM OUTLOOK – POSITIVE

AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP AUD) is 1.5491

The Australian Dollar has advanced today as expected benefiting from the ongoing pickup in risk appetite. The consumer confidence figures for April helped coming in above expectations at 104.1 in March, this represents a 1.2% increase in confidence from last month. This has helped GBP/AUD trade under 1.55 and puts the Australian Dollar close to record highs against the US Dollar. 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 2.0545 before pulling back into the 2.06’s. Retail sales figures in New Zealand due this evening will be the next determinant in establishing direction from here. We would expect the market for the Kiwi Dollar to continue to strengthen. NEAR-TERM OUTLOOK –POSITIVE

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