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

April 27, 2011 - Written by John Cameron

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

POUND STERLING

The Pound released a timely boost when this morning’s Q1 GDP figure showed that the UK economy has expanded by 0.5% in the first three months of 2010. The futures market is now pricing in 50 bps of UK rate rises over the next 12 months, which remains less than almost any other developed nation. NEAR-TERM OUTLOOK – NEUTRAL.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6521

The Dollar has continued to weaken over during today’s session. Analysts are expecting the FOMC to maintain interest rates at between 0 and 0.25% when they make their monetary policy announcement later today. Fed Chairman Ben Bernanke’s press conference which follows is unlikely to provide much support for the Greenback. NEAR-TERM OUTLOOK – NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1271

Fears persist that the contagion from the ongoing Eurozone sovereign debt crisis may prevent the ECB from a further tightening of monetary policy. Today’s German Consumer Confidence and inflation data was positive, but the continued positive data emanating from Germany may not be enough to prop up the Euro. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5319

Australian CPI inflation data released overnight, came out significantly higher than expected, raisng the likelihood of an RBA rate hike later in 2011. Private sector credit data released tonight could provide further evidence that the Australian economy is moving forward. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0604

The Reserve Bank of New Zealand is expected to keep interest rates at 2.50% when they make their policy announcement tonight. The Kiwi continues to perform strongly against the majors, but there is a possibility that this very strength may be hindering New Zealand exports. Tomorrow night’s NZ Trade numbers will confirm or refute this. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5787

The CAD has suffered further downside today ahead of this afternoon’s FOMC monetary policy announcement in the US. Any suggestion that the Fed is considering a tightening of monetary policy would cause further downside for the CAD. Friday’s Canadian GDP figure will determine investors’ outlook for Canadian interest rates. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

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