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

July 28, 2011 - Written by John Cameron

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

POUND STERLING

The Pound has recovered a little against the majority of the world’s most actively traded currencies. We would still however remain bearish on the Pound with a constant stream of Sterling negative data being released on a weekly basis. NEAR-TERM OUTLOOK – NEUTRAL - NEGATIVE

US DOLLAR – The Pound Dollar exchange rate (GBP/USD) is 1.6333

Pending homes sales figures rose in June as falling prices seem to be enticing buyers back to the market. The USD however is still looking decidedly bearish ahead of another round of voting from the US House of Representatives. It is unlikely that the Republican bill will be passed and we would therefore expect the ongoing debate to continue into trading through the weekend. President Obama has warned of “cataclysmic” repercussions and the threat of a problematic fall out of a debt default is now becoming a distinct possibility. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE.

EURO – The Pound Euro exchange rate (GBP/EUR) is 1.1422

The Euro as expected has come under increased selling pressure in trade today. The German unemployment figures came in under the expected figure showing an addition of 11,000 jobs amid expectations for 15,000. The actual unemployment rate held at 7% representing no change in the unemployment rate for the third month in a row. Ongoing concerns over European sovereign debt also factored with Italy being the problem country of the day. NEAR-TERM OUTLOOK – NEUTRAL TO NEGATIVE

AUSTRALIAN DOLLAR – The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4814

The Australian Dollar has reached record highs against the Pound today falling to a low of 1.4755. At the UK close it would appear that we are seeing some technical retracement before another fundamental move. In the coming months we could see an ongoing strengthening of the Australian Dollar and a move towards 1.45 is likely. NEAR-TERM OUTLOOK – NEUTRAL TO POSITIVE

CANADIAN DOLLAR– The Canadian Dollar exchange rate (GBP/CAD) is 1.5490

Commodity driven currencies such as the Canadian Dollar and the Kiwi Dollar have made further gains as rate hike expectations augmented. The Royal Bank of Canada hinted in a meeting last Wednesday that a rate hike could be on the cards in the near future and we would therefore expect to see an ongoing strength of the Canadian Dollar. NEAR TERM OUTLOOK - POSITIVE

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