Exchange Rates Forecast: Pound Euro (GBP EUR) Gains, Pound Dollar (GBP USD) Losses Predicted

May 9, 2014 - Written by John Cameron

STORY LINK Exchange Rates Forecast: Pound Euro (GBP EUR) Gains, Pound Dollar (GBP USD) Losses Predicted

The Pound to US Dollar (GBP/USD) and Pound to Australian Dollar (GBP/AUD) exchange rates have fallen today while the Pound euro exchange rate (GBP/EUR) has edged higher as investors express their fears over QE in the eurozone.

It was a case of good news / bad news for the Australian Dollar (currency:AUD) overnight following the publication of the Reserve Bank of Australia’s (RBA) latest statement on monetary policy.

On the credit side, the RBA upgraded its annualised GDP growth forecast from February’s 2.75% prediction to a healthier 3.00%. Investors focussed on this element of the missive, sending the Pound Australian Dollar exchange rate down to an overnight low of 1.8016 GBP/AUD.

However, the publication also brought a decreased inflation forecast – Australia’s reserve bank now expects the year-on-year rate of price rises to be 2.75% versus previous predictions of 3.00%. The development decreases any near-term pressure on the RBA to hike its key lending rate – a development which could anchor the Aussie tender moving forward.

Elsewhere, the Pound has put in a meek performance so far today, sending the major Pound Sterling pairs, with the exception of the Pound euro exchange rate GBP/EUR, lower. Investors appear to be wary of holding GBP-denominated assets following the publication of a disappointing set of March UK Industrial Production numbers earlier. The figures pointed to a slow-down in the rate of increase in output from British factories – a far from welcome development for Sterling-holders.

In spite of this, Pound Euro exchange rate has edged higher to 1.2247 GBP/EUR as market participants continue to price-in a high percentage chance that the European Central Bank will be introducing its own version of Quantitative Easing as soon as next month.

Meanwhile, the Pound US Dollar exchange rate has continued to peel back from its multi-year highs of earlier this week. The down shift for Sterling to Dollar rate looks to be technical in nature as speculators ‘take-profit’ at range topping rates. If the move lower persists for Cable, then expect the pair to track Southwards until it hits the proven level of resistance at the 1.6600 GBP/USD threshold.

Update - End of Trading Week Pound Sterling Exchange Rates - 09:00 10/05/2014

Yesterday's exchange rates saw the Pound Australian Dollar exchange rate close at 1.79977 GBP/AUD, Pound Canadian Dollar exchange rate close at 1.83632 GBP/CAD, Pound Swiss Franc exchange rate close at 1.49284 GBP/CHF, Pound Euro exchange rate close at 1.22465 GBP/EUR, Pound New Zealand Dollar exchange rate close at 1.95658 GBP/NZD, Pound Turkish Lira exchange rate close at 3.49911 GBP/TRY, Pound US Dollar exchange rate close at 1.68490 GBP/USD, and the Pound South African Rand exchange rate close at 17.44237 GBP/ZAR.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts