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

June 7, 2011 - Written by John Cameron

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

POUND STERLING

Sterling has struggled for direction in the currency markets today. With no data releases of note penned in for the next 36 hours, all eyes remain on the BoE interest rate decision on Thursday. Any tightening of the UK’s monetary policy would be a monumental surprise. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6445

The Dollar has weakened on the day ahead of Federal Reserve Chairman Ben Bernanke’s speech this evening UK time. With US data releases over recent weeks veering towards the soft side, rumours abound that Bernanke may be set to announce a further loosening of US monetary policy in the form of a third tranche of Quantitative Easing. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1222

Positive Eurozone data releases have taken the Euro higher against both the Pound and the Dollar on the day. This morning’s Eurozone-wide annualised Retail Sales figure for April showed an unexpected leap in European shop sales, whilst German Factory Order numbers also significantly bettered expectations. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5365

The Reserve Bank of Australia elected to keep Australian interest rates on hold at 4.75% during last night’s Asian session. In the light of the contraction in Australian GDP during Q1, this was hardly a surprise. However, the RBA’s accompanying statement was uncharacteristically dovish, commenting that Australian job creation looked to have hit a plateau and dampening speculation of an Australian interest hike over the next few months by describing current rates as ‘appropriate’. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


NEW ZEALAND DOLLAR – The Pound New Zealand Dollar exchange rate (GBP/CAD) is 2.0021

The Kiwi has made limited gains on the market today as the majority of institutional investors opted to sit on their hands ahead of tomorrow night’s RBNZ interest rate decision. Analysts are expecting rates to be held at 2.50%, but given the firmer tone of recent NZ economic data releases, a surprise hike of 25 basis points can not be ruled out. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


SWISS FRANC – The Pound Swiss Franc exchange rate (GBP/CHF) is 1.3762

This morning’s Swiss CPI Inflation figures came out slightly higher than analysts had anticipated, however the Franc has taken a step backwards on the day against nearly all of the sixteen most-actively traded currencies. On closer inspection, the figure was not as CHF-positive as as it had initially appeared, as it showed that there was no monthly change in Swiss prices during the month of May. In April, Swiss prices had risen by a monthly 0.10%. Given these figures, there seems little hope of a near-term hike in interest rates by Switzerland’s central bank. NEAR-TERM OUTLOOK – NEUTRAL.


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