Latest Forecasts - Pound Sterling to Euro, US Dollar and Australian Dollar Exchange Rates

July 4, 2014 - Written by John Cameron

STORY LINK Latest Forecasts - Pound Sterling to Euro, US Dollar and Australian Dollar Exchange Rates

Latest Forecasts - Pound Sterling to Euro, US Dollar and Australian Dollar Exchange Rates: Yesterday’s session in the global currency markets delivered several key developments which have the potential to trigger significant price action for the leading global currency pairs during coming weeks.

The EURO (currency:EUR) remains under heavy selling pressure following the assertion from European Central Bank President Mario Draghi that his Bank’s initial funding of its Long Term Re-financing Operations would amount to around €1 trillion. Draghi’s confirmation that regional interest rates would remain at record low levels into the medium term had the additional effect of holding back the single currency, sending the Pound Sterling euro exchange rate up to a fresh 21-month high.

The euro rate forecast is now firmly NEGATIVE and Pound to Euro exchange rate trades at 1.2598 GBP/EUR.

The US DOLLAR (currency:USD) firmed during the latter part of yesterday’s session following the publication of a stellar set of domestic jobs numbers.

The news that almost 300,000 new positions had been generated in the vast American economy last month helped the Buck and the surprise announcement that the overall level of joblessness in the States had dropped to 6.1% during June also assisted the Greenback.

Richard Franulovich, of Westpac Banking Corp, observed yesterday that, ‘the number is much stronger than expected, very encouraging’, and the Dollar is now likely to register gains against the other major currencies as a short-term result.

The US Dollar forecast is now NEUTRAL TO POSITIVE and the Pound to Dollar exchange rate stands at 1.7149 GBP/USD.

The AUSTRALIAN DOLLAR (currency:AUD) slumped in the currency markets yesterday following comments from Reserve Bank of Australia Governor Glenn Stevens.

The Top Man at the RBA, speaking at a conference in Hobart, observed that the Aussie was ‘overvalued, and not just by a few cents’, and went on to threaten that his Bank possessed the ‘ammunition’ to weaken the local tender. Investors shifted out of the Aussie en masse as a consequence, sending the Pound to Australian Dollar exchange rate up to as high as 1.8373 GBP/AUD.

Ben Jarman of JP Morgan concurred, observed that, ‘the governor has a high conviction that the Dollar’s fair value is lower and will get there but he might be getting frustrated with how long it’s taking.’

The Australian Dollar rate is now forecast to trade with a NEGATIVE bias moving forward.

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