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

June 3, 2011 - Written by John Cameron

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

POUND STERLING

UK PMI Services sector data came out worse than had been anticipated this morning, compounding the downward pressure on the Pound which followed Wednesday’s highly disappointing PMI Manufacturing survey. The poor Service sector data is particularly damaging for Sterling as many analysts had predicted that this would be the sector that would lead the UK out of recession. NEAR-TERM OUTLOOK – NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6372

Dramatically poor Non-Farm Payroll data for May, which was released earlier this afternoon, showed that only 54,000 new jobs were created in the States last month. Initially, the Greenback strengthened following the release, due to its role as global markets’ reserve currency of choice. However, following Moody’s threat to downgrade US debt, the USD’s continuance as a safe haven currency is under threat. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1235

Reports are circulating that Greece has agreed a second EU-IMF bailout, which will see the debt-addled Hellenic state avoid the immediate need to restructure its debt commitments. This morning’s German PMI Services data far outperformed expectations and market focus will now turn away from the EU sovereign debt crisis and back toward possible ECB interest rate rises. NEAR-TERM OUTLOOK – POSITIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5305

The Australian Dollar had a mixed day on the markets as global appetite for risk ebbed and flowed. Market relief at rumours of an imminent second bail-out for Greece led the GBP AUD lower to touch 1.5270, but it has since recovered as market participants change tack to adopt a risk averse stance following highly disappointing Non-Farm Payroll figures released in the States this afternoon. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/NZD) is 2.0158

Last night’s New Zealand Building Permits figure for April showed an unexpected contraction, which is concerning for investors holding NZD-denominated assets. Projections of healthy growth for the NZ economy for the second half of 2011 have been dependent on the construction sector operating at full tilt to re-build Christchurch after March’s earthquake. This afternoon’s dip in appetite for risk following weak US labour market data should see the GBP NZD rate finally reject the 2.00 level and retrace upwards. NEAR-TERM OUTLOOK – NEGATIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.3684

The Swiss Franc has enjoyed yet another day of gains on the market, with the GBP CHF exchange rate trading down by over 1.3% earlier in the day. With investors looking to place their funds into a safe haven following this afternoon’s highly disappointing US labour market data, the Franc appears to be the major beneficiary as the market shuns the Greenback. However, the Franc has come a long way in a short time and with a second Greek bail-out likely to ease fears of a European debt meltdown, the Swissie’s gains may slow. NEAR-TERM OUTLOOK –NEUTRAL TO POSITIVE.


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