Forex Forecast : Rate Predictions For GBP, USD, EUR, AUD, AED

July 5, 2011 - Written by John Cameron

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

POUND STERLING

Sterling received a boost earlier today with the release of a better-than-anticipated Purchasing Managers’ Index Services survey. This helped the Pound make gains against all of the majors with the exception of the Swiss Franc during Europe’s morning session, but Sterling’s forward move may be short-lived, with Thursday’s Bank of England monetary policy decision looming. NEAR-TERM OUTLOOK – NEUTRAL .


US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6110

With very little data of note released today in the States, the Dollar has traded steadily against the Pound and moved forward against the Euro, due to a weak performance by Europe’s single currency. Employment sector data due out in the US on Thursday and Friday will provide the next market-moving risk events, barring unforeseen developments in the intervening period. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1132

Weak data releases have suppressed the Euro during today’s session, with German PMI Services, Eurozone PMI Composite figures and Eurozone Retail Sales numbers for May all coming in below analysts’ expectations. With investors anticipating an ECB rate hike on Thursday, the Euro is set for a fall if rates are left on hold. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5057

As expected, the Reserve Bank of Australia elected to keep interest rates on hold at 4.75% overnight. In truth, Australia’s central bank had little option, given the weak nature of data releases over the past four weeks. The RBA’s accompanying statement noted that the historically strong Aussie Dollar was dampening domestic price rises and observed that the recent easing of global commodity prices would further negate the need for a tightening of domestic monetary policy. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.


ARAB EMIRATES DIRHAM – The Pound Dirham exchange rate (GBP/AED) is 5.9170

The Dirham remains directly pegged to the US Dollar, so any relative strength, or weakness, in the USD is directly mirrored in Dirham movements. Recent data releases in Japan, Australia, Europe and the UK have been generally softer than analysts had expected, causing considerable safe-haven support for the Dollar/Dirham. If global appetite for risk continues to ebb in coming sessions, the Dirham could see further support in the markets. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE.


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