Foreign Currency Exchange Rate Predictions : GBP to EUR, USD & CHF

Published: Tuesday, 20 November 2012 16:00 BST - Written by Frank Davies

STORY LINK Foreign Currency Exchange Rate Predictions : GBP to EUR, USD & CHF

The EURO has given up a modicum of ground against Sterling during today’s session, sending the GBP EUR exchange rate from its intraday low of 1.2416 back up into the mid-1.24s this afternoon. The shift out of euro-denominated assets comes ahead of this week’s key eurogroup decision on whether to allow Greece to drawdown on its latest tranche of emergency funding. In the lead-up to this key announcement, the single currency is expected to trade on a NEUTRAL TO NEGATIVE footing.

The US DOLLAR has registered some limited gains this afternoon, thanks to a poor showing in early trading from the New York Stock Exchange. The shift out of risk and into the safe haven T-Bill has been tempered by better than anticipated US Housing Starts and Building Permits data released earlier. With fears over the eurozone debt crisis still persisting, the Greenback is expected to trade with a NEUTRAL TO POSITIVE bias for the remainder of the week. The current GBP USD exchange rate is 1.5914.

The POUND STERLING has posted a relatively respectable performance against the other sixteen most actively traded global currencies. Sterling has enjoyed a slight bounce thanks to a flow of safe haven funds from institutional investors who remain wary of holding euro-denominated assets ahead of the eurozone’s upcoming Greek debt decision. For this reason, the UK tender is expected to trade on a NEUTRAL TO POSITIVE footing moving forward.

This morning’s Swiss Trade Balance data for October showed a significant increase in Switzerland’s trade surplus in comparison to the month before. The figure gives credence to the floor of 1.2000 which the Swiss National Bank has imposed on the EUR CHF exchange rate in recent months. The data has seen the Franc register a small gain against Sterling on the day, taking the GBP CHF exchange rate down to 1.4959. However, in light of the SNB’s self-imposed floor on its currency, the outlook for the CHF is no more than NEUTRAL.

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