Euro, US Dollar & Australian Dollar Exchange Rate Predictions Change; ECB Alters GDP Forecast

March 7, 2014 - Written by John Cameron

STORY LINK Euro, US Dollar & Australian Dollar Exchange Rate Predictions Change; ECB Alters GDP Forecast

After a period of relative calm in the global currency markets, it took comments yesterday from European Central Bank President Mario Draghi to provoke a shift for the world’s major currencies. Draghi played down the effect which the crisis in Crimea might have on the eurozone economy, instead concentrating on the ‘severe’ ramifications which it may have on the Russian financial system. The top man at the ECB went on to up his bank’s eurozone GDP growth forecast for 2014 and suggested that the risk of deflation in the mainland European economy was receding. So how have Draghi’s comments affected analysts’ forecasts for the future performance of the leading tenders in the currency markets...?

The EURO (currency:EUR) registered sharp gains against the Pound in the aftermath of Draghi’s press conference, sending the euro Pound exchange rate up to as high as 0.8289 EUR/GBP during the latter part of yesterday’s European equities session. The single currency also recorded good gains against the US Dollar in late trading, propelling the euro Dollar exchange rate up to close to 1.3900 EUR/USD. The single currency is now forecast to trade with a NEUTRAL TO NEGATIVE bias moving forward.

The US DOLLAR (currency:USD) gave up ground against nearly all of the other majors following Draghi’s words, sending the EUR USD exchange rate northwards. The shift out of the Greenback and into the euro had the additional effect of sending the GBP USD exchange rate up to 1.6777 during the middle part of the North American equities session. Today’s all-important Non-Farm Payrolls data in the States provides the next risk event of note for the Buck – a good print will allow the US tender to recover. In the meantime, the Dollar is predicted to continue to perform in a NEUTRAL TO NEGATIVE footing.

The AUSTRALIAN DOLLAR (currency:AUD) was the best performing currency during yesterday’s session thanks to Draghi’s words. The calm performance from the Italian policymaker reassured institutional investors, allowing risk sentiment to improve, favouring the commodity-driven Australian unit. Draghi’s assertion that the eurozone economic recovery had continued to gain traction over the past month played a key role in this. The outlook for the Aussie is now NEUTRAL ahead of this afternoon’s key US jobs figures.

Important Pound Sterling, Euro, US Dollar & Australian Dollar Exchange Rates (Publish: 11:00 GMT 07/03/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.19% at 1.83544 GBP/AUD.
The Pound Sterling to Euro exchange rate is trading down -0.13% at 1.20607 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading up +0.03% at 1.67458 GBP/USD.
The Euro to Australian Dollar exchange rate is trading down -0.06% at 1.52184 EUR/AUD.
The Euro to Pound Sterling exchange rate is trading up +0.13% at 0.82914 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.16% at 1.38847 EUR/USD.
The US Dollar to Australian Dollar exchange rate is trading down -0.22% at 1.09606 USD/AUD.
The US Dollar to Euro exchange rate is trading down -0.16% at 0.72022 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.03% at 0.59716 USD/GBP.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts