Foreign Exchange Rate Forecasts For Pound Sterling, Euro, Dollar & Australian Dollar

Modified: Thursday, 18 July 2013 15:20 BST - Written by Ben Hughes

STORY LINK Foreign Exchange Rate Forecasts For Pound Sterling, Euro, Dollar & Australian Dollar

A stronger than anticipated showing from this morning’s UK Retail Sales figure for last month has helped the POUND STERLING perform creditably so far today. However, the fact that the increase in sales was due to heavy discounting from stores took the edge off the ostensibly positive news. The Pound is expected to trade on a NEUTRAL footing ahead of tomorrow’s British Public Finance numbers.

The EURO has lost around a quarter of a percentage point against both the Pound and the Dollar so far today. The limited losses for the single currency suggest that investors remain reluctant to hold euro-denominated assets following the European Central Bank’s announcement earlier this month that domestic interest rates will remain low for some time to come. The current GBP EUR exchange rate sits at 1.1617 and the single currency is expected to trade on a NEUTRAL TO NEGATIVE footing moving forward.

The AUSTRALIAN DOLALR has given up ground against the Pound, US Dollar and euro so far today as a renewed downward move in the price of soft commodities including corn and soybeans hit the Aussie hard. However, the assertion from the Reserve Bank of Australia earlier this week that it is unlikely to cut its key lending rate again this side of Christmas continues to bolster the Australian tender. The Aussie is expected to trade on a NEUTRAL footing in the short-term. The GBP AUD exchange rate stands at 1.6598.

The US DOLLAR has firmed slightly against Sterling today, sending the Pound Dollar exchange rate (currency : GBP USD) down to as low as 1.5154 earlier. This price action suggest that investors have deciphered yesterday evening’s mixed messages from Federal Reserve Chairman Ben Bernanke as hinting that a near-term winding down of QE is unlikely in the States. The outlook for the Greenback is NEUTRAL TO NEGATIVE ahead of tonight’s continuing testimony from Bernanke.

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