EUR/GBP Forecast and CFTC Watch: Euro to Pound Exchange Rate Declines are Predicted

November 5, 2014 - Written by John Cameron

STORY LINK EUR/GBP Forecast and CFTC Watch: Euro to Pound Exchange Rate Declines are Predicted

Currency News UK forex analysts are forecasting further losses for the euro to pound exchange rate pair, but what conversion rates do they predict for the EUR/GBP conversion?

If you put ten economists in a room, you will get eleven different opinions, (or so the saying goes). If you put ten currency traders in a room, you would probably get twelve differing points of view.

Euro Rates Today:

The Euro to Pound exchange rate converts +0.15 per cent higher at 1 EUR is 0.78547 GBP.
The Euro to Dollar exchange rate today is converting -0.58 per cent lower at 1.24795 EUR/USD.

CFTC Data Monitors Speculative Positions

The Commodity Futures Trading Commission (CFTC) publishes statistics showing the net position of currency speculators on the major global tenders on a weekly basis and many investors look to the numbers for a steer on the likely future performance of the US Dollar (currency:USD), euro (currency:EUR) and Pound Sterling (currency:GBP), amongst others.

Euro Remains Out Of Favour

The latest version of the closely-watched figures revealed that support for the euro (currency:EUR) remains weak.

The previous week had seen a net 159,371 short positions on the single currency, while the most recent numbers showed that this had increased to a whopping 165,707.

The numbers suggest that investors remain almost convinced that the European Central Bank will be embarking on a fully-blown Quantitative Easing programme sooner rather than later.

Most analysts now forecast that the Pound to euro rate will break through to a fresh 6-year high in the 1.3000s sooner rather than later.

Temporary Gains For Japanese Yen

Elsewhere, the CFTC data revealed that, against expectations, support for the Japanese Yen (currency:JPY) had increased at the latest count, with 67,399 net short positions versus a previous showing of 71,738.

It should be noted that the numbers were tallied up last Tuesday and that the intervening period has seen the Bank of Japan announce that it is extending its already mammoth Quantitative Easing programme to a vast JPY80 trillion per year.

This Friday’s CFTC numbers are likely to show a major slump in the level of support for the Japanese tender.

Gains Forecast For US Dollar

Meanwhile, yesterday’s session saw Neptune Fund Management’s Robert Geffen forecast further losses for the Pound to Dollar exchange rate.

The investment profession predicted that the Pound Dollar exchange rate will slump to 1.5000 GBP USD in the short-to-medium term due to the fact that the US Federal Reserve’s policymakers, ‘are less constrained by the need to prop up the US housing market’.

The fact that America’s central bankers are ahead of the curve with regards monetary policy in comparison to almost all of the world’s other policymakers will bring sustained support for the USD moving forward.

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