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

May 17, 2011 - Written by John Cameron

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

POUND STERLING

This morning’s UK CPI Inflation figure far outstripped analysts’ expectations, coming out at an annualised 4.5%, its highest level since the Autumn of 2008. However, Sterling has failed to move forward against the UAD and EUR in spite of this apparently positive release, which is a bad sign for investors holding Sterling-denominated assets. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6194

This afternoon has seen the release of highly negative US Construction Sector data, with Housing Starts and Building Permits figures both coming out significantly worse than expectations. The Greenback has still managed to hold its own in the markets, showing that global risk appetite is on the wane. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1434

The Euro has traded within tight trading ranges against the other majors on the day as investors sit on their hands and wait for further announcements from the Finance Ministers’ Summit in Brussels. The single currency gained some support overnight when Euro Group Leader, Jean-Claude Juncker ruled out a ‘large re-structuring’ of Greece’sdebt. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5325

The Australian Dollar initially gained ground overnight following the release of the minutes of the Reserve Bank of Australia’s most recent monetary policy meeting. The minutes stated that the RBA may need to further tighten its monetary policy ‘at some stage’, but went on to suggest that Australia’s central bank felt that domestic inflation would be self-correcting due to the current strength of the Aussie. NEAR-TERM OUTLOOK – NEUTRAL.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5812

Levels on Canadian Dollar pairs are increasingly being determined by global appetite for risk, which in turn is affecting the wholesale price of commodities. With risk sentiment on the wane and the Eurozone seemingly on the verge of a sovereign debt crisis, many analysts are predicting potential downside for the commodity-driven CAD. NEAR-TERM OUTLOOK –NEAGTIVE.


NORWEGIAN KRONE – The Pound Norwegian Krone exchange rate (GBP/NOK) is 9.0779

The Norwegian Krone has made gains in recent sessions following last week’s decision by the Norges Bank to increase its headline interest rate by 25 bps to 2.25%. However, the Krone has struggled on the day as speculators take profit following strong support for the Krone since that rate hike. However, the NOK is likely to re-establish its recent uptrend sooner rather than later, with further hikes likely in an attempt to control domestic credit expansion. NEAR-TERM OUTLOOK – POSITIVE.

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