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Foreign Exchange Rate Forecasts & Predictions: Euro, Pound, Australian Dollar & US Dollar

February 26, 2014 - Written by Frank Davies

The European Commission’s Winter Economic Forecasts, published yesterday, provided some room for optimism for investors holding EURO-denominated assets, revealing that the eurozone’s policymakers had upwardly revised their GDP growth forecasts for this year and next. However, the EC’s observation that the region’s recovery was ‘gaining ground’ was not enough to stop the Pound Euro exchange rate climbing to as high as 1.2152 GBP/EUR on the day. The single currency is still forecast to trade with a NEUTRAL TO NEGATIVE bias moving forward.

The POUND STERLING (currency:GBP) put in a steady performance in the markets yesterday as investors sat on their hands ahead of this morning’s all-important UK Q4 GDP data. The Pound’s near-term performance hinges on this key gauge of economic activity, and given the disappointing nature of recent British services sector data, the GDP figure could well serve to disappoint. If the quarterly GDP print shows at below the expected 0.7%, then look for the Pound to perform on a NEUTRAL TO NEGATIVE footing moving forward.

The AUSTRALIAN DOLLAR’S (currency:AUD) improvement against the Pound during the past month hit the wall at the end of last week thanks to a weaker than expected survey of China’s manufacturing sector. Yesterday’s confirmation from leading motor manufacturer Toyota that it will be ending production of its cars in Australia is likely to have a similarly subduing effect on the Aussie. Rumours of further credit restrictions in China’s property market may hold back the Australian unit moving forward, so the Aussie is now forecast to trade on a NEUTRAL footing in the short term.

The US DOLLAR (currency:USD) incurred yet another body blow during yesterday’s afternoon session following the publication of a weak US Consumer Confidence survey. The Pound Dollar exchange rate was trading at 1.6670 GBP/USD, close to its multi-year high, during the final hour of the European equities session and if tomorrow’s comments from new Fed Chairperson Janet Yellen hint at a pausing of the US central bank’s Quantitative Easing programme, then things could get worse for the Greenback before they get better. The outlook for the Buck is now NEUTRAL TO NEGATIVE.

Important Pound Sterling, Euro, US Dollar & Australian Dollar Exchange Rates (Updated: 11:00 GMT 26/02/2014)

The Pound Sterling to Australian Dollar exchange rate is trading up +0.19% at 1.85415 GBP/AUD.
The Pound Sterling to Euro exchange rate is trading up +0.12% at 1.21461 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading up +0.11% at 1.66936 GBP/USD.
The Euro to Australian Dollar exchange rate is trading up +0.07% at 1.52654 EUR/AUD.
The Euro to Pound Sterling exchange rate is trading down -0.12% at 0.82331 EUR/GBP.
The Euro to US Dollar exchange rate is trading down -0.01% at 1.37440 EUR/USD.
The US Dollar to Australian Dollar exchange rate is trading up +0.08% at 1.11070 USD/AUD.
The US Dollar to Euro exchange rate is trading up +0.01% at 0.72759 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.11% at 0.59903 USD/GBP.
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