Pound Dollar Forecast: Losses Predicted for GBP USD Exchange Rate

Modified: Tuesday, 18 March 2014 21:43 BST - Written by John Cameron

STORY LINK Pound Dollar Forecast: Losses Predicted for GBP USD Exchange Rate

The Pound Sterling (currency:GBP) has put in a dismal performance against the other major currencies during today’s session, sending the Pound euro exchange rate down to as low as 1.1902 GBP/EUR during this afternoon’s session. Meanwhile, the Pound US Dollar exchange rate has dipped to a monthly low at 1.6545 a short time ago GBP/USD.

However, there was one major currency which the Pound Sterling held its own against during today’s session – the Canadian Dollar (currency:CAD). The Pound Canadian Dollar exchange rate has hovered just below the 1.8400 GBP/CAD level for most of this afternoon’s session – barely down from where it started the day – following comments from Bank of Canada Governor Stephen Poloz. The head man at the BoC suggested that lower levels of domestic inflation and weak projections for economic growth may force his Bank to introduce a more accommodative monetary policy and the Loonie slumped in response. However, Poloz did add the caveat that the poor showing from Canada’s Q1 GDP data was due to the terrible winter which the North American nation has experienced.

Elsewhere, tomorrow’s session has the potential to provoke pronounced market movement for the world’s leading currency pairs, with the morning session alone bringing the publication of the minutes of the Bank of England’s March monetary policy meeting, along with January’s British joblessness numbers. Recent UK labour market numbers have provided grounds for encouragement regarding the state of the domestic economic recovery, so the potential exists that the Pound may move forward following their release.

The UK Chancellor of the Exchequer, George Osborne, takes to the despatch box at lunchtime to deliver his Budget Statement to parliament – this may prove to be a red herring, as the British Finance Minister is expected to focus on micro rather than macroeconomic policy. However, the latest US Federal Reserve policy decision has the potential to alter levels on the Dollar – a Quantitative Easing cut of anything more than $10bn and the Pound Dollar exchange rate will drop towards the 1.6000 threshold GBP/USD.

Important Pound Sterling / Euro / Dollar Exchange Rates (Updated: 21:00 GMT 18/03/2014)

The Pound Sterling to Canadian Dollar exchange rate is trading up +0.44% at 1.84824 GBP/CAD.
The Pound Sterling to Euro exchange rate is trading down -0.32% at 1.19090 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading down -0.26% at 1.65932 GBP/USD.

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