Foreign Currency Exchange Rate Predictions For GBP EUR USD NZD

March 12, 2014 - Written by Ben Hughes

STORY LINK Foreign Currency Exchange Rate Predictions For GBP EUR USD NZD

The POUND STERLING has been under the cosh during this week’s trading session as market participants factor-in a high percentage chance that the UK tender has topped out against the euro, US Dollar and Commodity Dollars. Friday’s UK trade balance figures are the last tier one data release for the Pound this week, and given Bank of England Deputy Governor Charlie Bean’s assertion on Monday that the resurgent Pound of the last 12 months is hurting UK exporters, a strong print is far from guaranteed. Sterling is predicted to trade with a NEUTRAL TO NEGATIVE bias moving forward.

The EURO has bullied Sterling so far this week, sending the Pound euro exchange rate down to 1.1977 yesterday GBP/EUR. The single currency could do with a strong showing from this morning’s eurozone Industrial Production figures for January in order to further fuel its forward move, however tomorrow morning’s European Central Bank monthly report is the next major market-moving risk event for the euro. Further commentary from Europe’s central bank suggesting that regional inflation is on the rise could send GBP EUR down into the low-1.1800s. The single currency is expected to trade on a NEUTRAL TO POSITIVE footing in the near-term.

The US DOLLAR has crept higher against the Pound this week, sending the Pound Dollar exchange rate down to as low as 1.6592 yesterday GBP USD. A lack of US data of note so far this week suggests that the improvement for the Buck has been driven by last Friday’s stronger than expected US job creation data. However, gains for the Greenback are not certain to stick, given that Friday’s numbers also revealed that the overall level of joblessness in the States has unexpectedly increased, making further tapering of QE from the Federal Reserve less likely. The outlook for the Dollar is NEUTRAL.

Tonight’s Reserve Bank of New Zealand (RBNZ) monetary policy decision is likely to determine the future direction of the NEW ZEALAND DOLLAR in the short term. The RBNZ is expected to announce that it is one of the first major global central banks to hike its interest rates as the world returns to normality following 2008’s devastating credit crisis. A 25 basis point increase to the Kiwi Official Lending Rate is expected, but don’t rule out a hike of 50 basis points. For this reason, the Kiwi is forecast to trade on a NEUTRAL TO POSITIVE footing moving forward. The current GBP NZD exchange rate stands at 1.9624.

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