Foreign Currency Exchange Rate Prediction For GBP EUR And Forecasts For USD & CHF

February 12, 2013 - Written by James Fuller

STORY LINK Foreign Currency Exchange Rate Prediction For GBP EUR And Forecasts For USD & CHF

The POUND STERLING has endured another dismal session in the currency markets, almost totally eradicating its gains of the second half of last week against the other global majors. The fact that this morning’s UK CPI inflation data revealed that the rate of British price rises remains well above target, and yet Sterling has still suffered on the day, hints at the lack of confidence which investors feel towards the Pound. The near-term outlook for the UK tender is NEUTRAL TO NEGATIVE.

The EURO has once again performed creditably in the currency markets so far today. Despite the recent strengthening of the euro being a hot topic at today’s eurozone Finance Ministers’ summit, expectations remain that the ECB will refrain from taking part in any global currency war which may start in earnest later this year. For this reason, the single currency is expected to trade with a NEUTRAL TO POSITIVE bias moving forward. The current GBP EUR exchange rate stands at 1.1604.

The safe-haven US DOLLAR has registered healthy gains against the majority of the other sixteen most-actively traded currencies so far today. The flight to quality which followed North Korea’s confirmation that it carried out a nuclear test last night has seen the Greenback well-supported, sending the GBP USD exchange rate down as low as 1.5568 earlier. The ‘Buck’ is expected to trade on a NEUTRAL TO POSITIVE footing in the short term.

The SWISS FRANC continues to perform well, largely thanks to its de facto coupling to the euro. This morning’s Swiss Consumer Price Index data revealed that domestic prices are decreasing, suggesting that the Swiss National Bank’s policy of weakening the Franc is not causing the Swiss economy to import inflation. It appears likely that while this is the case, the SNB will persevere with its policy. The current GBP CHF exchange rate sits at 1.4306 and the Franc is expected to head into tomorrow’s session on a NEUTRAL TO POSITIVE footing.

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