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

April 18, 2011 - Written by John Cameron

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

POUND STERLING

The Rightmove House Price Survey for May, which was released late last night, provided some respite for the Pound. The survey showed that UK property prices rose by a monthly amount of almost 2%. There was no other UK tier one data released today, so Sterling’s pronounced move forward against the other majors was caused by problems elsewhere. NEAR-TERM OUTLOOK – NEUTRAL.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6236

Leading Ratings agency, Standard & Poors, expressed concerns about the state of US Public Finances in a report released today. Although S&P maintained the US’s credit rating at AAA, it downgraded the outlook for the US from ‘stable’ to ‘negative’ and hinted that America’s debt rating could be downgraded within two years. This is likely to deal a further blow to the Greenback’s increasingly precarious position as the world’s leading reserve currency. NEAR-TERM OUTLOOK – NEUTRAL TO NEAGTIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1418

The Euro has performed extremely weakly on the markets today, with GBP EUR up by 1% at one point and EUR USD dropping by 1.5%. The downward move has been caused by heightened fears of an impending sovereign debt crisis in the Eurozone as the credit markets become increasingly jittery about Greece, Ireland, Portugal and Spain’s ability to repay their national debts. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5465

The Australian Dollar suffered a relatively weak day on the markets. The FTSE 100 closed down by over 2% on the session and the S&P500 in the States is currently trading down by 1.58% as fear of a US debt crisis adds to existing fears of a Eurozone debt meltdown. The Aussie has come a long way very quickly, so there is significant potential for Aussie downside if this weakness in risk sentiment continues. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0613

The Kiwi had a poor day on the currency markets following lower-than-anticipated CPI inflation figures which were released overnight. It now seems unlikely that the RBNZ will raise interest rates in the near future. The New Zealand Dollar suffered further downside following a tightening of monetary policy by the Chinese central bank over the weekend, which may cause a weakening in demand for NZ exports in the medium term. NEAR-TERM OUTLOOK – NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5729

Commodity prices have edged downwards during today’s session, following the Chinese central bank’s action to increase reserve ratios for retail banks. This action is intended to control rising prices in the World’s second largest economy, but will have the likely side-effect of cooling demand for oil. The CAD was a big loser on the day because of its status as a commodity-driven currency. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

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