Exchange Rate Outlook Forecast for Majors : GBP EUR USD AUD NZD CAD

May 4, 2011 - Written by John Cameron

STORY LINK Exchange Rate Outlook Forecast for Majors : GBP EUR USD AUD NZD CAD

POUND STERLING

Today saw another day of Sterling-negative data releases, with the Nationwide House Price survey and PMI Construction sector figures coming in significantly worse than expected. Tomorrow’s Bank of England Monetary policy decision is unlikely to provide any support for the Pound, with rates remaining at 0.50% and no accompanying statement. NEAR-TERM OUTLOOK – NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6515

US data disappointed on the day, with the ISM Non-manufacturing composite printing at a significantly lower level than had been expected. This afternoon’s US employment change figure also came in below expectations, suggesting that Friday’s Non-Farm Payrolls figure also has the potential to disappoint. NEAR-TERM OUTLOOK – NEUTRAL to NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1123

News of the terms of Portugal’s bail-out was well-received by the market and the Euro has broken to new highs on EUR GBP and EUR USD. However, the Euro’s gains were pared later in today’s European morning session when whole of Eurozone Retail Sales Figures for March came in significantly worse than had been expected, casting doubt over the likelihood of another ECB interest rate rise tomorrow. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5254

This afternoon saw a significant drop-off in global risk sentiment, with the FTSE 100 and S&P 500 both down by over 1%, causing the Aussie to weaken significantly. Tomorrow’s Australian Retail Sales figure could see the Australian Dollar re-establish its uptrend against the other majors, however, Friday’s Non-Farm Payroll number will be the primary determinant of risk appetite for the remainder of the week. NEAR-TERM OUTLOOK – NEUTRAL.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0938

The New Zealand Dollar was the worst performing of the 16 most-actively traded currencies on the day, as a dip in risk sentiment hit the Kiwi hard. Analysts have also suggested that speculators have been closing their Kiwi positions ahead of tonight’s unpredictable NZ employment data. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5836

The Canadian Dollar has edged lower against the other majors today as oil prices continue to fall, in line with commodity prices in general. Negative US data has also hurt the CAD. A positive set of Canadian employment data on Friday would provide a much-needed fillip. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

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