Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, NZD

Modified: Thursday, 27 September 2012 14:40 BST - Written by Tim Boyer

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, NZD

Economic activity in the British economy is contracting at a slightly slower pace than had previously been estimated, according to this morning’s finalised version of the UK’s Q2 GDP growth figures. However, a 0.4% shrinkage in the British economy in the space of three months is hardly cause for celebration. In spite of this, the POUND STERLING has registered moderate gains against most of the other majors so far today, and is expected to trade with a NEUTRAL TO POSITIVE bias moving forward.

This afternoon’s US data made grim reading for investors holding US DOLLAR-denominated assets. The effect of very weak Durable Goods figures for last month were accentuated by Q2 GDP Growth numbers which printed at a much lower level than had been anticipated. The Greenback has weakened in the aftermath of the releases, suggesting that market participants are still viewing poor US data sets as giving the green light for the Fed to up the $40bn per month they have allocated to QE3. While this remains the case, the Buck is likely to trade on a NEUTRAL TO NEGATIVE footing. The GBP USD exchange rate stands at 1.6225.

The EURO has once again leaked support against the Pound today, sending the GBP EUR exchange rate up to 1.2620 this afternoon. Comments from the ECB’s Weidmann suggesting that any closer union of banks in the eurozone should not bring a cancellation of existing debt has added to the feeling of unease regarding the single currency. Tomorrow brings the results of the Wyman Stress Tests on the country’s banks, bringing the potential for further downside for the euro; the single currency trades on a NEUTRAL TO NEGATIVE footing in the near-term.

The NEW ZEALAND DOLLAR has been one of the best-performing currencies on the day, following last night’s positive showing for the latest NBNZ Activity Outlook survey. However, with socio-political tensions in the eurozone threatening to escalate, the positive move for the Kiwi may not last. Next week’s light data schedule for the New Zealand economy means that stock market movements should be closely-watched for clues as to future price movements for the NZD. For this reason, the Kiwi is expected to trade on with a NEUTRAL TO NEGATIVE bias. The GBP NZD exchange rate stands at 1.9585.

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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts