Today's Exchange Rates: Pound Sterling Higher vs Euro & Dollar, New Zealand Dollar Forecast Lower

June 26, 2014 - Written by John Cameron

STORY LINK Today's Exchange Rates: Pound Sterling Higher vs Euro & Dollar, New Zealand Dollar Forecast Lower

Currency News UK brings you today's exchange rates analysis and forecast for the Pound Sterling (GBP), Euro (EUR), US Dollar (USD), and New Zealand Dollar (NZD).

The British Pound managed to hold onto this week's gains versus the US Dollar as the trading week came to a close, trading well above the key 1.7 GBP/USD of late. Sterling, however, lost ground to the Euro over the course of Friday as strong German data bolstered the single currency, pushing below 1.25.

The weekend foreign exchange rates show:

• The pound to euro exchange rate finished the week at 1.24824 GBP/EUR.
• The pound to dollar exchange rate today sits at 1.70384 GBP/USD.

Sterling pushed higher against both EUR and USD on Thursday's session in spite of further detail from the Bank of England (BoE) regarding its plans to curb the rate of rises in UK property prices.

The Bank’s Financial Policy Committee has proposed that any British lender will have to ensure that 85% of its mortgages are at under 4.5 times the mortgagee’s annual income.

Moving forward, each individual mortgage will also be stress tested for a potential 3% increase in interest rates.

The Pound has not lost any significant support on the day following the development, but the tightening of lending in the retail banking sector is likely to limit the flow of credit into the UK economy for years to come, potentially cooling the British economic recovery and weighing heavily on Sterling moving forward.

However, the near-term appraisal from the market has seen Sterling well-supported, with the Pound euro exchange rate climbing to an intraday high of 1.2524 GBP/EUR earlier. Meanwhile, the Sterling US Dollar exchange rate (GBP/USD) has edged higher again, touching 1.7040 during this morning’s session. Cable now stands within a fraction of a cent of the 5 ½ year high which it struck last year.

Ian Stannard, Head of European Currency Strategy at Morgan Stanley, outlined the reason for the UK tender’s positive performance on the day, observing earlier that, ‘Sterling gained some support because the measures are in line with indications we got from Carney that the FPC’s approach would be slow and gradual.’ The suggestion from the Top Man at the BoE that he was set to take an even-handed approach to Britain’s potential housing bubble could curb medium term losses for the Pound.

Meanwhile, the Pound New Zealand Dollar exchange rate (GBP/NZD) has been one of the few Sterling-based currency pairs which has failed to record gains so far today. GBP NZD has dropped to as low as 1.9347 on the day as institutional investors continue interpret Federal Reserve comments as hinting at continued ultra-low interest rate in the States.

Neil Mellor of Bank of New York Mellon, observed this morning that, ‘it’s fairly clear that the RBNZ have embraced the tightening cycle. The emphasis that there has been on yield seeking has been stoked further.’ So, it appears that as long as a risk-on environment persists in the global markets, the GBP NZD exchange rate forecast will continue to be negative.

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 Currency Predictions Dollar Poun Forecasts