Currency Exchange Rate Predictions For Euro, Pound Sterling, Dollar & New Zealand Dollar

Modified: Wednesday, 21 August 2013 16:22 BST - Written by Frank Davies

STORY LINK Currency Exchange Rate Predictions For Euro, Pound Sterling, Dollar & New Zealand Dollar

The EURO has performed meekly during today’s session, sending the GBP EUR exchange rate up to 1.1725 earlier. A complete absence of eurozone data today has left market participants to concentrate on yesterday’s lower than anticipated German Producer Price data. The fear remains for investors holding euros that the ECB may be set to further loosen monetary policy. While these concerns exist, the single currency is expected to trade with a NEUTRAL TO NGATIVE bias.

More positive data from the UK economy has helped the POUND STERLING to cling on to its recent gains against the other majors today. A better than anticipated Public Sector Net Borrowing figure for last month provided encouragement for investors holding Sterling. This morning’s CBI data, which suggested that orders for British manufacturing firms are at their strongest level for two years added to the positivity surrounding the UK unit. The outlook for the Pound is NEUTRAL TO POSITIVE.

The US DOLLAR has continued to give up ground during today’s session, sending the GBP USD exchange rate up to 1.5701 earlier. Price action for Cable suggests that most investors believe that the US Federal Reserve will not be cutting its Quantitative Easing programme next month. We will learn more when the minutes of the Fed’s FOMC meeting from earlier this month are published later today. The Greenback is expected to trade on a NEUTRAL TO NEGATIVE footing in the meantime.

The NEW ZEALAND DOLLAR has once again slumped against the other majors today. Investors have reacted strongly to the Reserve Bank of New Zealand’s new policy which will limit loans for over 80% of the purchase price of properties. The controversial housing policy is likely to trigger a cooling of activity in New Zealand’s real economy and the Kiwi Dollar could suffer as a consequence. The outlook for the New Zealand tender is therefore NEUTRAL TO NEGATIVE and the current GBP NZD exchange rate stands at 1.9860.

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