Exchange Rate Forecasts & Predictions For Pound Sterling, Euro, US Dollar & Australian Dollar

Modified: Thursday, 16 January 2014 12:05 BST - Written by Minesh Chaudhari

STORY LINK Exchange Rate Forecasts & Predictions For Pound Sterling, Euro, US Dollar & Australian Dollar

The POUND STERLING (currency:GBP) performed well against most of the other sixteen most-actively traded global currencies with the exception of the Commodity Dollars during yesterday’s session in spite of more isolationist comments from the UK Chancellor of the Exchequer. George Osborne stated that if the European Union does not instigate root and branch reform, then Britain may be forced to exit the EU. These comments, combined with lower than expected UK CPI inflation numbers published earlier this week, mean that the Pound is forecast to trade on a NEUTRAL TO POSITIVE footing moving forward.

The EURO (currency:EUR) gave up ground against both the US Dollar and Pound yesterday, sending the Pound Euro exchange rate up to as high as 1.2065 GBP/EUR. The tame performance from the single currency was driven by a weaker than anticipated set of German Gross Domestic Product data which showed at a below par 0.4%. The next risk event of note for the euro comes in the form of this morning’s whole of eurozone Consumer Price Index data. If the price rise figure comes out below their anticipated level, then expect calls for the European Central Bank to further loosen its monetary policy to increase. The outlook for the euro is therefore NEUTRAL TO NEGATIVE.

The US DOLLAR (currency:USD) was provided with an unexpected fillip yesterday afternoon when the ordinarily little-monitored Empire Manufacturing survey, which gauges activity levels in New York’s manufacturing sector, thrashed analysts’ expectations. The NY data, coupled with Tuesday’s strong US retail sales numbers, has generated the impression that the US economy has turned a corner and that the Fed is now free to cut its controversial Quantitative Easing programme. The current Pound Dollar exchange rate stands at 1.6375 GBP/USD and the Buck is expected to trade on a NEUTRAL TO NEGATIVE footing moving forward.

Tame Chinese economic statistics hurt the AUSTRALIAN DOLLAR (currency:AUD) yesterday morning, sending the Pound Australian Dollar exchange rate up to as high as 1.8465 GBP/AUD during early trading. The December New Yuan Loans data from China showed at a level far below that expected by economists, providing further evidence that activity levels may be set to continue to drop-off in the economy of one of Australia’s major trading partners. The Aussie recovered during yesterday’s New York session as speculators queued up to close their earlier positions. The Australian tender is expected to trade with a NEUTRAL TO NEGATIVE bias moving forward.

Important Australian Dollar, Euro, Pound Sterling & US Dollar Exchange Rates (Updated: 12:00 GMT 16/01/2014)

The Pound Sterling to Australian Dollar exchange rate is trading up +1.17% at 1.85908 GBP/AUD.
The Pound Sterling to Euro exchange rate is trading down -0.24% at 1.20019 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading down -0.16% at 1.63362 GBP/USD.
The Euro to Australian Dollar exchange rate is trading up +1.42% at 1.54899 EUR/AUD.
The Euro to Pound Sterling exchange rate is trading up +0.24% at 0.83320 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.08% at 1.36114 EUR/USD.

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