Exchange Rate Predictions: Pound (GBP), Euro (EUR), US Dollar (USD) & New Zealad Dollar (NZD)

Modified: Wednesday, 11 September 2013 15:43 BST - Written by Ben Hughes

STORY LINK Exchange Rate Predictions: Pound (GBP), Euro (EUR), US Dollar (USD) & New Zealad Dollar (NZD)

The POUND STERLING has registered decent gains on the day thanks to a stronger than anticipated set of domestic unemployment figures. UK jobs numbers have taken on added significance since the Bank of England announced that it would not countenance raising UK interest rates until the overall level of unemployment dropped below the 7.0% threshold. Today’s unexpected move down to 7.7% brings a near-term tightening of UK monetary policy closer. The Pound is forecast to trade on a NEUTRAL TO POSITIVE footing moving forward.

The EURO has traded sideways today following the publication of German CPI data which came in exactly as per expectations earlier on. However, support for the Pound has meant that the Sterling euro exchange rate (GBP/EUR) briefly climbed back above the 1.1900 level earlier on. Tomorrow morning’s ECB monthly report will be more closely-monitored than ever following ECB President Mario Draghi’s revelation last week that his bank’s policy committee had discussed a potential cut in eurozone interest rates at their last meeting. The outlook for the single currency is therefore NEGATIVE.

The US DOLLAR has continued to give up ground against the other majors so far today. The move against the Greenback, which began at the end of last month, suggests that investors believe it is increasingly unlikely that the US Federal Reserve will announce that it is tapering its Quantitative Easing programme next week. Upside market momentum for GBP USD is likely to continue, at least until Friday’s US Retail Sales and Michigan Confidence survey, so the Buck is expected to trade on a NEUTRAL TO NEGATIVE footing until this time. The current GBP USD exchange rate is 1.5778.

The NEW ZEALAND DOLLAR has given up ground against Sterling ahead of tonight’s Reserve Bank of New Zealand (RBNZ) policy announcement, sending the GBP NZD exchange rate up to as high as 1.9625 earlier. Given the tone of recent comments from the RBNZ, it would appear likely that tonight’s statement which will accompany the decision is likely to make mention of a potential increase in New Zealand’s key lending rate. The New Zealand tender is expected to trade on a NEUTRAL TO POSITIVE footing in anticipation of such an outcome.

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