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

April 14, 2014 - Written by John Cameron

STORY LINK Exchange Rate Forecasts / Predictions: Euro, Pound, Australian Dollar & US Dollar

As the week’s trading session gets underway, the EURO (currency:EUR) appears to be firmly in the ‘at risk’ category thanks to European Central Bank President Mario Draghi’s comments in Washington over the weekend. Draghi asserted at the IMF’s spring conference that any strengthening of the single currency would act as a prompt for his board to further loosen monetary policy. Expect the euro to suffer this week as a consequence, meaning that the near-term outlook for the single currency is NEGATIVE. The current Pound Euro exchange rate is 1.2080 GBP/EUR.

The POUND STERLING (currency:GBP) had a quiet time of it on Friday as other currencies made their moves on the market. However, tomorrow morning’s UK inflation numbers are likely to trigger movement for the Pound. Analysts are expecting another sizeable fall in the rate of British price rises – a result which would cause investors to put back their expectations regarding the timing of the next Bank of England interest rate rise, hurting the Pound. The Pound Sterling forecast is now NEUTRAL TO NEGATIVE.

The AUSTRALIAN DOLLAR (currency:AUD) put in a strong performance as last week’s session drew to a close following a highly positive set of Aussie labour market figures. However, global risk events could hamper the Australian unit this week. Friday’s session brought a pronounced sell off of technology stocks in Asia. If this gains momentum this week, then the Aussie is likely to give up ground. Fears of an escalation of the situation in the Ukraine also threaten the Australian tender, whith the GBP/AUD forecast now to trade with a NEUTRAL TO NEGATIVE bias moving forward. The Pound Australian Dollar exchange rate stands at 1.7816 GBP/AUD.

The US DOLLAR (currency:USD) endured another poor week in the markets last week as new Federal Reserve Chairperson Janet Yellen performed a volte face and suggested that a US interest rate hike might be a while off yet. The news saw the GBP USD exchange rate make a move higher which saw it threaten the 1.7000 level. If tomorrow afternoon’s US inflation figures print at below expectations, then a tightening of domestic monetary policy will appear an even more distant prospect. The outlook for the Buck is therefore NEUTRAL TO NEGATIVE and the Pound Dollar exchange rate currently stands at 1.6730 GBP/USD.

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