Exchange Rate Forecast: Pound to Dollar Lower, Sterling to Rand & Lira Higher

February 5, 2014 - Written by David Woodsmith

STORY LINK Exchange Rate Forecast: Pound to Dollar Lower, Sterling to Rand & Lira Higher

It’s official. The upheaval in emerging markets since the turn of the year is the fault of policymakers in these nations. Or so says the Bank of England’s Executive Director for Financial Stability, Andy Haldane.

The man from the BoE observed, during a speech at Oxford University yesterday, that "What is going on with the head-to-head combat is people pursuing policies of individual countries.”. Haldane assertion will provide little comfort for investors holding the South African Rand or the Turkish Lira following the sharp move higher for the GBP ZAR and GBP TRY exchange rates during recent weeks.

The flaky performance from emerging market currencies has been driven by distinctly disappointing data during recent sessions and by the US Federal Reserve’s apparent determination to press on with its steady tapering of Quantitative Easing. Watch this space for further gains for GBP ZAR, GBP TRY and other Sterling –v- minor currency pairs.

Elsewhere, the Pound to US Dollar exchange rate (GBP/USD) incurred renewed losses during yesterday’s session following a better than anticipated set of December Factory Orders numbers for December in the States. The figures still showed a month-on-month dip, but as was ever the case, everything is relative. The outcome saw Cable edge downwards to 1.6256 – its lowest level since the week before Christmas - during the latter part of the European session.

The move came in spite of a strong UK PMI construction survey yesterday morning which thrashed analysts’ expectations of a 61.5 showing to print at 64.6. With the British press full of talk of a fresh housing bubble in the UK, it is hardly surprising that British house builders’ order books are overflowing. Look for a strong showing from this afternoon’s US ISM services sector survey in order to further fuel GBP USD’s extant downward move. The next significant level of support heading lower comes at mid-December’s 1.6217.

Important Pound Sterling, US Dollar, Lira & Rand Exchange Rates (Updated: 11:00 GMT 05/02/2014)

The Pound Sterling to Turkish Lira exchange rate is trading down -0.33% at 3.64197 GBP/TRY.
The Pound Sterling to US Dollar exchange rate is trading down -0.34% at 1.62738 GBP/USD.
The Pound Sterling to South African Rand exchange rate is trading down -0.3% at 18.06005 GBP/ZAR.
The Euro to Turkish Lira exchange rate is trading down -0.03% at 3.02361 EUR/TRY.
The Euro to US Dollar exchange rate is trading down -0.04% at 1.35107 EUR/USD.
The Euro to South African Rand exchange rate is trading up +0% at 14.99372 EUR/ZAR.
The US Dollar to Turkish Lira exchange rate is trading up +0.01% at 2.23794 USD/TRY.
The US Dollar to South African Rand exchange rate is trading up +0.04% at 11.09766 USD/ZAR.
The US Dollar to Pound Sterling exchange rate is trading up +0.34% at 0.61449 USD/GBP.

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