Foreign Exchange Rate Forecasts For Pound Sterling, Euro, US Dollar & Canadian Dollar

Modified: Friday, 16 August 2013 17:34 BST - Written by John Cameron

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

The POUND STERLING has suffered a broadly negative session in the currency markets on the day. Sterling had enjoyed a positive week until today as investors gave the thumbs up to the Bank of England’s Forward Guidance policy. However, a central plank of this policy has the potential to hold back the UK tender in the medium term – British interest rates will remain at their ultra-low level for years to come. The Pound is predicted to trade on a NEUTRAL footing moving forward.

The EURO has managed to claw back a small amount of lost ground against the Pound and the Dollar on the session. This morning’s whole of eurozone CPI inflation data came in as per analysts’ expectations at 1.1%, suggesting that the European Central Bank retains the scope to further loosen its monetary policy. For this reason, the outlook for the single currency is NEUTRAL TO NEGATIVE. The current GBP EUR exchange rate stands at 1.1707.

A weak Michigan Confidence Survey, released a short time ago, is likely to hamper the US DOLLAR into next week. The disappointing showing from closely-monitored sentiment gauge adds to the impression generated by yesterday’s poor US data that the American economy is stalling and that the Fed’s QE programme may be here to stay. The current GBP USD exchange rate stands at 1.5638 and the outlook for the Greenback is NEUTRAL TO NEGATIVE.

The CANADIAN DOLLAR has endured a torrid session today. The Loonie has suffered against Sterling, sending the GBP CAD exchange rate up to close to the 1.6200 threshold earlier due to the publication of poor US data during the latter part of the week. However, the disappointing numbers out of the States may prove to be a double-edged sword – bad US figures may mean no near-term tapering of QE from the US Federal Reserve. The CAD is expected to trade on a NEUTRAL TO POSITIVE footing moving forward.

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