Exchange Rate Predictions for Euro, Pound, Dollar and Yen

Modified: Wednesday, 14 January 2015 11:25 BST - Written by John Cameron

STORY LINK Exchange Rate Predictions for Euro, Pound, Dollar and Yen

Exchange Rate Forecasts for the Pound Sterling, Euro, US Dollar and the Yen

GBP EUR Exchange Rate Threatens 6-Year High

The Quantitative Easing rumour mill went into overdrive during yesterday’s session and the EURO (currency:EUR) suffered as a consequence.

The shift out of EUR-denominated assets sent the GBP EUR exchange rate to within a whisker of its 6-year high during late trading yesterday and there could be more gains to come for the pair if sovereign debt purchases are announced by the ECB next week.

The outlook for the single currency remains fervently NEGATIVE and the GBP EUR exchange rate stands at 1.2880.

Sterling Exchange Rate Steady In Spite of UK Inflation Data

The POUND STERLING (currency:GBP) traded on a level footing yesterday in spite of the publication of economic statistics which revealed that the rate of UK inflation dropped to its equal lowest level in recorded history last month.

The news followed Monday’s plunge to a fresh 6-year low for global oil prices, which mitigated the British figure as investors factored-in a high chance that inflation will drop to close to zero across all major economies. Sterling is forecast to trade with a NEUTRAL bias moving forward.

Dollar Exchange Rate Trades Sideways

The US DOLLAR (currency:USD) struggled to hold its own against the Pound yesterday. The Greenback continued to be weighed down by last Friday’s data which pointed to an anaemic level of US wage growth.

The Buck was supported by conventional wisdom which suggested that the Federal Reserve would be hiking its key interest rate in the early part of 2015 as last year drew to a close.

However, the plunge in the global price of oil during recent months has taken the pressure off the Fed to act. The outlook for the Dollar remains NEUTRAL TO POSITIVE and the GBP USD exchange rate stands at 1.5163.

Yen Exchange Rate Forecast to Weaken Again

The JAPANESE YEN (currency:JPY) has put in a strong performance during this week’s session thanks to its position as a low-yielding safe haven currency.

However, a day of gains for global shares yesterday means that investors’ focus may swing back on the likely continuation of the bank of Japan’s ultra loose monetary policy throughout this year.

The forecast for the Yen remains NEGATIVE and the GBP JPY exchange rate stands at 179.060.

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