Exchange Rates Forecast for Pound Sterling to Dollar, Australian & New Zealand Dollars

Modified: Wednesday, 24 July 2013 19:56 BST - Written by David Woodsmith

STORY LINK Exchange Rates Forecast for Pound Sterling to Dollar, Australian & New Zealand Dollars

The US Dollar made a pronounced comeback against Sterling during the latter part of yesterday afternoon’s session. The move saw the Pound to Dollar exchange rate (currency : GBP USD) tumble from an intraday high of 1.5390 all the way down into the 1.5200s during the hours following the European equities close.

Support for the Greenback was partly triggered by a highly positive set of US housing market figures which revealed a monthly jump of 8.3% in the number of new home sales in the States during the month of June. The subprime mortgage crisis which first broke in 2007 has been widely-blamed by analysts for triggering the global credit crisis of 2007/8 – as the old adage goes, ‘first in, first out’. With this in mind, many analysts are looking to the US property market to lead the world economy back to healthier levels of growth. The next level of significance for GBP USD comes at the psychologically important 1.5000 level.

Looking ahead to today’s session, the GBP USD exchange rate will be provided with further direction by a combination of this morning’s provisional UK GDP data for Q2 and this afternoon’s US Durable Goods Orders data for last month. The potential exists for the UK growth numbers to disappoint, so if the US figure impresses, then look for Cable to make a real run at 1.5000. In such a set of circumstances, then look for the high-yielding currencies to lose support, cancelling out any losses for Sterling.

Such a scenario could see level trading on the day for the Pound to Australian Dollar (GBP AUD) and Pound to New Zealand Dollar (GBP NZD) exchange rates. Both pairs enjoyed healthy gains yesterday as investors’ jitters regarding a near-term tapering of Quantitative Easing in the US continued. Such a move would severely hamper both GBP AUD and GBP NZD, potentially pushing both pairs above the key 1.7000 and two to one levels respectively.

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