Forex Forecast : Rate Predictions For GBP, USD, EUR, AUD, CAD, CHF

May 11, 2011 - Written by John Cameron

STORY LINK Forex Forecast : Rate Predictions For GBP, USD, EUR, AUD, CAD, CHF

POUND STERLING

This morning’s Bank of England Quarterly Inflation Report was massively supportive for the Pound, with the Bank predicting that the UK economy will return to annualised growth of 3% the year after next and that UK inflation would break above 5% in the near-term. Analysts have adjusted their predictions for UK interest rates accordingly. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6457

The Dollar has seen sideways trading on the day, losing around half a per cent against Sterling and gaining slightly more against the Euro. Stock markets have struggled to move forward on the day, causing the Greenback to struggle for direction. This afternoon’s US Trade Balance figure printed broadly in line with expectations. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1511

This morning’s German CPI Inflation figure came out almost exactly as expected, thus failing to alter investors’ Eurozone interest rate expectations. ECB Interest Rate expectations for the remainder of 2011 continue to prop up the single currency, but it may not be too long before ECB Governing Council Members’ rhetoric becomes more dovish, given continuing sovereign debt concerns in periphery states. NEAR-TERM OUTLOOK – NEUTRAL.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5292

Economic data emanating from China in the last 48 hours has been of a generally positive tone, with last night’s CPI Inflation figure coming out at above expectations and far better than expected trade figures 24 hours earlier. These numbers have helped prop up the Aussie in spite of extreme volatility in the commodities markets. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5744

The Canadian Dollar enjoyed a largely positive day on the markets due to better than expected domestic trade figures which showed that Canada’s Trade Surplus is widening. Market rumours of potential Canadian Mergers and Acquisition activity have caused further support for the CAD. NEAR-TERM OUTLOOK – NEUTRAL TO NEAGTIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.4534

The Swiss Franc has held steady on the day as equities market suffered a bout of indecision. With no Swiss data of note due for release until Friday’s price data, the Franc remains susceptible to a forward move in risk sentiment, particularly given yesterday’s disappointing Swiss inflation data. NEAR-TERM OUTLOOK – NEGATIVE.

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