Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, CAD, JPY

June 14, 2011 - Written by John Cameron

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, CAD, JPY

POUND STERLING

This morning’s CPI inflation figure for May showed that annualised inflation in the UK remains at the same level as it was in April. Analysts had expected this, but the Pound still edged forward against most of the majors on the day. However, the persistent rise in UK prices is unlikely to cause the Bank of England to shift monetary policy to a tightening bias until at least the end of the year. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6392

This afternoon’s Advanced Retail Sales showed a contraction in US shop sales of 0.2% in May, against expectations of a 0.5% reduction. Annualised Producer Price Index data for last month, released at the same time, also came out higher than expectations. This better-than-anticipated data has so far failed to cause any significant Dollar strength. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1354

The Euro has arrested its recent weakening bias against the Pound and the Dollar during today’s session. However it has also failed to make any significant strides forward as market participants continue to worry about Eurozone debts. With S&P’s downgrade of Greece’s debt to CCC last night, the troubled Hellenic state now has the lowest-rated debt of any global government. The average yield on Spanish debt increased at today’s auction, raising further concerns. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5385

Last night’s NAB Business Confidence survey for May showed a drop from April’s figure. Soft Australian data releases over the last two weeks bear this out, suggesting that the economic climate in Australia is deteriorating. However, with the S&P 500 and the FTSE 100 both trading up on the day, the Aussie has still managed to gain against most of the other sixteen most-actively traded global currencies. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


CANADIAN DOLLAR – The Pound Canadian Dollar exchange rate (GBP/CAD) is 1.5907

The Canadian Dollar has pared some of its recent losses against the majors during today’s session. The CAD has benefitted from higher than expected Chinese inflation figures, which point to strong aggregate demand in the second half of 2011 in the world’s second largest economy. This afternoon’s positive US producer price and shop sales figures have also helped the CAD. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


JAPANESE YEN – The Pound Japanese Yen exchange rate (GBP/JPY) is 132.05

The Yen has broadly lost ground on the day following last night’s positive equities session in Tokyo, which saw the Nikkei Dow gain over 1%. With the S&P 500 and the FTSE 100 mirroring the Nikkei’s performance, institutional investors have shifted their funds out of the Asian reserve currency. With weak Japanese data releases over the past month, further downside is possible for the Yen. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


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