Foreign Currency Exchange Rate Predictions For GBP EUR USD NZD

Modified: Friday, 10 January 2014 10:29 BST - Written by Frank Davies

STORY LINK Foreign Currency Exchange Rate Predictions For GBP EUR USD NZD

No change to base rate, no alteration to its £375bn QE programme and no forward guidance statement from the Bank of England ensured that the POUND STERLING endured a steady day in the markets yesterday. Worse than anticipated UK trade balance figures for November yesterday morning failed to elicit any pronounced downside for the Pound; if this morning’s UK Industrial and Manufacturing Production numbers also disappoint then look for Sterling to trade with a NEUTRAL TO NEGATIVE bias as the weekend approaches.

The EURO suffered a pronounced bout of selling pressure following European Central Bank President Mario Draghi’s press conference yesterday afternoon. Draghi used the Q&A session to confirm that his Bank’s interest rates will remain at close to zero percent for a long time to come. The generalised downbeat tone of his comments added to investors’ reluctance to hold euro-denominated assets on the day and the upshot saw GBP EUR briefly break through the 1.2150 threshold. The euro is forecast to trade on a NEUTRAL TO NEGATIVE footing moving forward.

The US DOLLAR has incurred further losses against Sterling since Wednesday evening’s publication of the minutes of the latest Federal Reserve FOMC meeting. The memos of December’s get-together, which yielded a $10bn cut to the Fed’s QE programme, showed that a large number of Fed policymakers argued vehemently against any cut. With Janet Yellen – a well-known dove – set to take the helm at the Fed at the start of February, the outlook for the Buck is now NEUTRAL TO NEGATIVE.

The NEW ZEALAND DOLLAR has experienced an uncomfortable 24hrs, sending the GBP NZD exchange rate up to as high as 1.9979 at London’s equities close yesterday afternoon. The Kiwi has suffered in recent sessions thanks to a generalised softening of the economic data emerging from its number one export market – China. December’s cut to Quantitative Easing from the US Federal Reserve has not helped the New Zealand tender either. However, GBP NZD now stands just below a key level of technical resistance meaning that the Kiwi is predicted to trade on a NEUTRAL TO POSITIVE footing in the near term.

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