Today's Exchange Rate Predictions For GBP, EUR, USD & AUD

Modified: Tuesday, 4 September 2012 14:45 BST - Written by Minesh Chaudhari

STORY LINK Today's Exchange Rate Predictions For GBP, EUR, USD & AUD

After yesterday’s positive PMI Manufacturing survey, it was a case of ‘back down to earth with a bump’ for the POUND STERLING today, following the release of a disappointing PMI Construction survey, which showed that the building sector the UK economy unexpectedly contracted last month. Investors holding Sterling are nervously awaiting Thursday’s Bank of England rate announcement following MPC member Martin Weale’s calls for a cut in Britain’s base rate last week.

This morning’s eurozone Producer Price Index data came out higher than expected, confirming that persistent price rises remain a feature of Europe’s economy. This would suggest that the European Central Bank’s hands are tied regarding near-term interest rate cuts – we will learn more on Thursday. The current GBP EUR exchange rate stands at 1.2624.

The US DOLLAR has remained under pressure in the currency markets today, in spite of widespread losses for stock markets. Investors’ reluctance to hold Greenback-denominated assets comes down to the fact that expectations remain high for a further bout of QE sooner rather than later in the States. If these expectations do not come to pass, then the Buck could make a comeback. The GBP USD exchange rate sits at 1.5872.

The AUSTRALIAN DOLLAR has experienced a limited bout of support following last night’s Reserve Bank of Australia policy announcement, which saw Australian interest rates kept on hold, as per expectations. The fact that the accompanying statement made no mention of the ultra-strong Aussie Dollar hurting Australia’s domestic economy, provided a boost for the Australian tender. If the US Federal Reserve continues to suggest that QE3 is on the cards in the US, then there could be more upside to come for the AUD. The current GBP AUD exchange rate is 1.5504.

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