Pound Euro (GBP/EUR) & Pound Australian Dollar (GBP/AUD) Exchange Rates Forecast To Fall

Modified: Friday, 14 February 2014 14:51 BST - Written by David Woodsmith

STORY LINK Pound Euro (GBP/EUR) & Pound Australian Dollar (GBP/AUD) Exchange Rates Forecast To Fall

Strong economic stats from the eurozone have provided a fillip for investors holding euro-denominated assets this morning. Gross Domestic Product data from France led the way earlier, revealing that the Gallic economy has avoided falling into recession during the final half of 2013. The growth figures for the final three months of last year pointed to a return to growth for France, printing at a stronger than anticipated 0.3%, meanwhile counterpart Q3 figures were upwardly revised to 0.0%. The numbers meant that France had avoided experiencing two consecutive quarters of negative growth – the standard criteria used by economists to qualify a technical recession.

Market participants holding euro-denominated assets did not have to wait for long before the next set of positive news to arrive; whole of eurozone GDP growth data, published at 1000hrs GMT, revealed that mainland Europe’s economy expanded at a faster than anticipated 0.3% during the final quarter of last year. The upshot of the two encouraging growth prints from Europe has seen the GBP EUR exchange rate edge slightly lower from its intraday high of 1.2204 which it hit earlier.

Elsewhere, last night’s Chinese Consumer Price Index inflation numbers showed that the rate of price rises in the world’s second largest economy remained steady at 2.5% in January. The news that inflation in China remains well under control provides the People’s Bank of China with scope to further stimulate the nation’s economy later in the year if it deems such an action necessary. The development came as good news for the risk-driven Australian and New Zealand Dollars, meaning that the GBP AUD and GBP NZD exchange rates may fall as we head towards the weekend market shutdown.

Looking ahead, the next tier one data release of note in the currency markets comes this afternoon with the publication of the latest Michigan Confidence survey at 1455hrs GMT. A print of above the expected 80.2 showing would be likely to bring renewed support for the Greenback, propelling the Pound US Dollar exchange rate (GBP USD) back down for the 1.6700+ trading rates where it has spent much of today’s session.

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TAGS: Australian Dollar Forecasts Currency Predictions Euro Forecasts Eur Forecasts