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

June 1, 2011 - Written by John Cameron

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

POUND STERLING

The Pound has suffered significant downside on the day following a poor PMI Manufacturing survey for May. To add insult to injury, April’s PMI Manufacturing was downwardly revised. This number gives little scope for the Bank of England’s MPC to raise interest rates at next week’s meeting. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6396

This afternoon’s US ADP Employment Change figure for May severely disappointed analysts when it was released an hour ago. The figure showed that the number of US workers employed in the manufacturing sector shrank for the first time since last Autumn. The Dollar has seen some support in the markets since the release due to its safe haven status, but investors may move against the Greenback if Friday’s Non-Farm Payroll figure confirms a softening in US Labour Market Conditions. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1377

This morning’s whole of Eurozone PMI Manufacturing survey came in slightly below expectations, but the disappointing number failed to halt the Euro’s progress as it strengthened to trade above 1.44 against the USD. Market jitters over an imminent Greek default have receded, leading to speculation of an ECB rate hike before mid-Summer. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5268

The Australian Dollar has strengthened on the day, with the GBP AUD rate down by almost 1% by the start of Europe’s afternoon session. Last night’s Australian GDP figure showed the largest quarterly contraction for Australia’s economy for over twenty years, however institutional investors have dismissed this figure as ‘not as bad as it could have been’ and are instead concentrating on improved global risk sentiment thanks to reduced fears of a Eurozone sovereign debt meltdown. NEAR-TERM OUTLOOK – NEUTRAL.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.3806

The Franc has been the best performing of the sixteen most-actively traded currencies today as investors moved into the CHF following this morning’s far better than anticipated Swiss PMI Survey for May. Swiss Retail Sales figures showing an annualised increase of 7.5% provided further encouragement as the Franc traded through key levels against the Euro and US Dollar.NEAR-TERM OUTLOOK –NEUTRAL TO POSITIVE.


NEW TURKISH LIRA – The Pound New Turkish Lira exchange rate (GBP/TRY) is 2.6072

The Lira has gained significant support in the markets since the Turkish central bank announced on Monday that it is reducing the amount of UD Dollars it is purchasing at daily auctions. The move will reduce the supply of TRY onto the market, effectively causing a tightening of Turkish monetary policy. The GBP TRY rate has rejected the 2.65 level that it touched last week and looks set to retrace back towards the 2.50-2.55 range that it visited a month ago. NEAR-TERM OUTLOOK – POSITIVE.


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