Exchange Rate Forecast for Euro, Pound, Canadian & US Dollar

Modified: Thursday, 24 October 2013 17:30 BST - Written by Tim Boyer

STORY LINK Exchange Rate Forecast for Euro, Pound, Canadian & US Dollar

The EURO registered gains against Sterling yesterday in spite of a relatively weak whole of eurozone Composite Purchasing Manager Index survey. Price action in the market suggests that the single currency was oversold when the Pound euro exchange rate briefly broke the 1.2000 threshold two weeks ago. The euro is expected to trade with a NEUTRAL bias in the lead-up to this morning’s German IFO survey.

A strong showing from yesterday morning’s CBI Business Optimism survey of the UK economy wasn’t enough to help the POUND STERLING losing ground on the day yesterday. Investors holding Pound-denominated assets will be hoping for a strong showing from this morning’s Q3 GDP numbers in order to push Sterling forward again. The UK tender is forecast to trade on a NEUTRAL TO NEGATIVE footing moving forward.

The CANADIAN DOLLAR continues to suffer against all of the other sixteen most actively traded global currencies, sending the Pound Canadian Dollar exchange rate up to as high as 1.6879 yesterday. The US government shutdown of the first half of this month has hit the Loonie hard and Wednesday’s assertion by the Bank of Canada that its next interest rate move may not necessarily be to the upside has piled the pressure on the Canadian unit. The outlook for the CAD is now NEGATIVE.

The US DOLLAR put in another meek performance in the global currency markets during yesterday’s session, meaning that the Pound US Dollar exchange rate currently sits at 1.6173. A disappointing set of Initial Jobless Claims data, published yesterday afternoon, haven’t helped the Greenback’s near-term chances, increasing the chances that the Federal Reserve will maintain its Quantitative Easing programme at its current $85bn per month into next year. The Buck is desperately in need of a positive showing from this afternoon’s Durable Goods Orders data. In the meantime, it is likely to continue trading on a NEUTRAL TO NEGATIVE footing.

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