Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, CHF, ZAR

May 26, 2011 - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, CHF, ZAR

POUND STERLING

With no tier one data released in the UK today, the Pound gained ground on the other majors due to Euro and US Dollar weakness in the market. Tonight’s GfK Consumer Confidence survey for May tomorrow is the last significant UK data release before the long weekends; this will lend it added significance. NEAR-TERM OUTLOOK – NEUTRAL .


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6346

The Dollar has come under heavy selling pressure this afternoon following a far weaker than expected annualised GDP Growth figure released in the US. Personal consumption figures also disappointed, causing the GBP USD rate to gain over 0.5% on the day. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1593

Comments by Eurozone policy-makers have caused heavy selling pressure on the Euro during the latter part of this afternoon’s European session. ECB Board Member González Paramo stated that European banks are overly dependent on Europe’s central bank and that this can not be allowed to continue. Board member Bini Smaghi added to the pressure when he suggested that Eurozone states that fail to keep to the terms of their bail-outs should have their ECB funding pulled. NEAR-TERM OUTLOOK – NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5444

The Aussie has lost ground as the day progressed as global appetite for risk ebbed away as market jitters regarding Eurozone retail banks and sovereign debts increased. Last night’s Australian Housing Sector and Private Capital Expenditure data had helped strengthen the Australian Dollar in early trading. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.4197

The Franc continues to garner market support due to its role as Europe’s safe-haven currency of choice. It is likely that the Swissie will gain further ground as investors’ fears over the state of the Eurozone’s retail banking sector pick up ground. This morning’s Swiss Trade Balance figure for April showed a healthy improvement from March’s number, further assisting the Franc. NEAR-TERM OUTLOOK – POSITIVE.


SOUTH AFRICAN RAND – The Pound South African Rand exchange rate (GBP/ZAR) is 11.4505

The GBP ZAR rate has traded to within a tenth of a Rand of its highest level since the end of February within the last 24 hours. Eskom, which provides 95% of power used in South Africa, denied rumours that a South African power outage was imminent, but the whispers were enough for the ZAR to trade lower. As a high-yielder, the Rand has also come under selling pressure in recent weeks due to a dip in global appetite for risk.


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