Exchange Rate Forecast For Pound Sterling (GBP), Euro (EUR), US Dollar (USD) & New Zealand Dollar (NZD)

Modified: Monday, 25 November 2013 10:51 BST - Written by David Woodsmith

STORY LINK Exchange Rate Forecast For Pound Sterling (GBP), Euro (EUR), US Dollar (USD) & New Zealand Dollar (NZD)

The POUND STERLING suffered a pronounced wobble on Friday following comments from the Bank of England’s chief economist Spencer Dale, who stated that the UK economy has several years of economic recovery left before normal conditions prevail once more. The highlight of a quiet roster of data releases this week comes on Wednesday morning in the form of Q3’s GDP figure. Sterling is forecast to trade on a NEUTRAL footing in the meantime.

The EURO posted a small gain against Sterling during the final session of last week, sending the GBP EUR exchange rate down into the lower half of the 1.1900-1.2000 range. The single currency was assisted by a strong German business survey on Friday and similarly positive German labour market figures this Thursday morning could send GBP EUR lower again. The outlook for the euro in the short-term is NEUTRAL TO POSITIVE.

’What should go up and doesn’t go up can only come down’. This old market adage may prove to be bad news for the US DOLLAR during the week to come. Last week’s confirmation from the US Federal Reserve that it will begin tapering Quantitative Easing during the next few months should have triggered a bout of support for the Buck. The fact that it hasn’t could spell bad news for the Greenback this week. However, strong US Consumer Confidence and Durable Goods Orders in the middle part of this week could see the Greenback trade on a NEUTRAL TO POSITIVE footing once more.

Market support for the NEW ZEALAND DOLLAR slumped during the latter part of last week’s session following the Wednesday publication of memos from the latest US central bank policy meeting which suggested that America’s asset purchase scheme is on the way out. Tomorrow’s New Zealand trade figures are expected to disappoint and with the threat of a damaging race with the Reserve Bank of Australia to weaken the Kiwi against the Aussie emerging, the NZD is expected to trade on a NEGATIVE footing moving forward.

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