Gains Forecast For Euro Dollar Exchange Rate (EUR/USD), Losses Predicted For Pound Euro (GBP/EUR)

March 13, 2014 - Written by John Cameron

STORY LINK Gains Forecast For Euro Dollar Exchange Rate (EUR/USD), Losses Predicted For Pound Euro (GBP/EUR)

The major move in the global currency markets yesterday afternoon came for the world’s premier currency pair. Euro to US Dollar exchanges EUR/USD account for a large majority of the total volume daily transacted in the global markets by dint of America and the eurozone’s standing as the world’s two most developed economies. The pair had been languishing below the 1.3500 threshold as recently as the first week of last month, but price action in the intervening period has seen a pronounced forward move which culminated in a fresh 2 ½ year high of 1.3915 during late trading yesterday.

The sharp move northwards for EUR USD was fuelled by comments and actions from the European Central Bank, with last Thursday’s upward revision to its 2014 eurozone GDP growth forecast proving to be particularly helpful to the single currency. ECB President Mario Draghi’s emphatic assertion during his press conference the same day, that the prospect of deflation was no longer a threat to the mainland European economy also helped the euro.

Meanwhile, events on the other side of the Atlantic have had a similarly positive effect on the euro US Dollar exchange rate EUR/USD, with last Friday’s American labour market numbers, which pointed to a surprise increase in the overall level of joblessness in the States, causing investors to scale back their bets on a rapid cessation of the Fed’s controversial Quantitative Easing programme. The Greenback slumped as a result.

From a technical perspective, yesterday evening’s move higher for EUR/USD confirms the pair’s near-term uptrend. Last time the pair changed hands in this territory, during October 2011, EUR/USD was tracking lower from a 51-month high of 1.4940. If the move higher for the pair persists, then this is the next significant level to look for. In such a circumstance, the Pound euro exchange rate is likely to suffer losses due to arbitrage funding.

Important Pound Sterling, Euro & US Dollar Exchange Rates (As of: 10:00 GMT 13/03/2014)

The Pound Sterling to Euro exchange rate is trading up +0% at 1.19530 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading up +0.38% at 1.66803 GBP/USD.
The Euro to Pound Sterling exchange rate is trading down -0% at 0.83661 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.38% at 1.39549 EUR/USD.
The US Dollar to Euro exchange rate is trading down -0.38% at 0.71659 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.38% at 0.59951 USD/GBP.

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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts