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

Modified: Monday, 12 August 2013 16:11 BST - Written by Ben Hughes

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

A barren session for UK data releases has meant that the POUND STERLING has drifted sideways against most of the other majors so far today. Tonight’s RICS House Price survey could provide the Pound with renewed positive momentum, given the encouraging tone of recent British property data. In the meantime, Sterling is expected to trade with a NEUTRAL TO POSITIVE bias.

The EURO has lost ground against most of the other major currencies on the session. The shift out of euro-denominated assets has been triggered by investors’ nervousness regarding tomorrow morning’s German CPI Inflation numbers. Last week’s comments from the European Central Bank suggested that the slow rate of eurozone price rises meant that a further loosening of monetary policy might be possible and a lower than anticipated set of German inflation figures tomorrow could further stoke speculation regarding this. The outlook for the single currency is NEUTRAL TO NEGATIVE and the current GBP EUR exchange rate sits at 1.1648.

The AUSTRALIAN DOLLAR has lost only a small amount of ground against Sterling so far today, sending the GBP AUD exchange rate up to 1.6886. The softening of last week’s support for the Aussie has been caused by weaker than anticipated Japanese Q2 GDP growth data released overnight. A quiet week for Australian data releases means that the next move for the AUD may be driven by news from the US regarding the Fed’s plans for QE. In the meantime, the Aussie is expected to trade on a NEUTRAL TO NEGATIVE footing.

A drop off in the value of futures market contracts on the S&P 500 suggests that institutional investors believe that a scaling back of Quantitative Easing from the Fed is back on the cards. The US DOLLAR has hovered up support so far today in anticipation of such an event, sending the Pound Dollar exchange rate (currency : GBP USD) down to 1.5458 earlier. The outlook for the Greenback is NEUTRAL TO POSITIVE.

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