Foreign Exchange Rate Forecasts: Euro (EUR), Pound Sterling (GBP), Dollar (USD) & Canadian Dollar (CAD)

The Latest Foreign Exchange Rate Forecasts and Predictions for the Euro (EUR), Pound Sterling (GBP), Dollar (USD) and the Canadian Dollar (CAD) -

The POUND STERLING (currency:GBP) put in an encouraging performance on the day yesterday following a positive response from market participants to the Bank of England’s latest plans to cool down the over-heating UK property market. Gavin Friend of National Australia Bank captured the mood in the markets, stating that, ‘the Pound is higher on the assumption these measures are fairly benign for the economy.’

The main event today for the Pound is, without a doubt, this morning’s final version of the Q1 UK Gross Domestic Product figure. A showing of anything other than the previous year-on-year estimate of 3.1% would be a surprise, so the short-term Pound Sterling forecast is NEUTRAL.

The near-term prospects for the EURO (currency:EUR) hinge on this morning’s whole of eurozone Consumer Confidence survey.

The recent message from the European Central Bank has been decidedly downbeat, with President Mario Draghi announcing a ‘kitchen sink’ raft of measures aimed at averting all-out deflation in his region’s economy.

If this morning’s survey suggests that the raft of measures has served simply to spook market participants, the single currency is likely to lose further support, meaning that the consensus expectation for analysts is the euro rate forecast is NEUTRAL TO NEGATIVE. The Pound to euro exchange rate stands at 1.2503 GBP/EUR.

The US DOLLAR (currency:USD) has remained friendless in the markets throughout this week’s session.

Yesterday afternoon’s US weekly labour market figures came out slightly below expectations, further suppressing the Buck.

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The major hindrance for the Greenback during this week has been Wednesday afternoon’s dire Q1 US GDP figure, which showed that the vast American economy shrank by a startling 2.9% during the three months leading up to the end of March of this year. Looking ahead, the main event for the Dollar ahead of the weekend close id this afternoon’s Michigan Confidence survey which is expected to reveal a slight uptick in sentiment among American economic participants.

Anything other than this and the dollar exchange rate forecast is NEGATIVE. The Pound to Dollar exchange rate stands at 1.7014 GBP/USD.

This afternoon’s highlight as far as investors holding the CANADIAN DOLLAR (currency:CAD) are concerned, comes in the form of the latest set of domestic Industrial Product Price data.

The figure is not ordinarily a closely-monitored one, but with recent economic statistics pointing to a pronounced improvement in Canada’s export-driven economy, it takes on added significance.

Strong Canadian GDP data and increasing domestic price rise figures within the past few weeks have caused institutional investors to price-in a higher percentage chance of a near-term interest rate hike from the Bank of Canada.

If this afternoon’s number suggests that inflation is surging in Canada, then look for the Loonie to register further gains against the Pound, potentially sending GBP CAD down towards the 1.8000 threshold.

The outlook for the CAD is now NEUTRAL TO POSITIVE and the Pound to Canadian Dollar rate stands at 1.8222 GBP/CAD.

To read further currency exchange forecasts or to lock in the best exchange rates for international payments, please contact our resident FX expert John Cameron.

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