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

May 13, 2011 - Written by John Cameron

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

POUND STERLING

Doubts have surfaced over the strength of the UK’s economy following yesterday’s disappointing NIESR GDP forecast and today’s lowering of the European Commission’s UK Growth Forecast for 2011. Expectations for a UK interest rate rise have been lowered accordingly. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6206

This afternoon’s annualised CPI Inflation figure came out slightly higher than expectations in the US, showing that US inflation stand at its highest level for thirty months. A better-than-anticipated Michigan Consumer Confidence Survey this afternoon saw further support for the Greenback. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1413

French and German Q1 GDP data far exceeded expectations on its release this morning, causing a surge of support for the Euro. The single currency should gain further ground following comments by ECB President Jean Claude Trichet this afternoon, which confirmed the ECB’s ongoing commitment to maintaining Eurozone price stability. NEAR-TERM OUTLOOK – NEUTRAL.


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

In the absence of any Australian data releases, the Aussie was left to trade according to the whims of risk sentiment on the day. Initially today, global risk appetite improved on better-than-expected European GDP figures, however, the Aussie suffered some losses later on as commodities continue to edge downwards. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0598

The New Zealand Dollar was one of the worst performing currencies on the day, with the GBP NZD exchange rate rising by over half a percentage point. The softening of the NZD is partly due to fears that commodity prices may have peaked and partly attributable to comments by the RBNZ Governor Alan Bollard, who stated that the Kiwi is ’undesirably high’. NEAR-TERM OUTLOOK – NEAGTIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.4384

The Franc has once again fared better than most of the major currencies as investors seek out a safe haven for their funds over continuing fears that the Eurozone sovereign debt crisis may escalate. This morning’s disappointing Swiss Producer & Import Price data may halt the Swissy’s gains. NEAR-TERM OUTLOOK – NEUTRAL.

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