Exchange Rate Forecasts For British Pound Sterling vs Euro, NZ Dollar and US Dollar

Modified: Tuesday, 17 March 2015 22:48 BST - Written by John Cameron

STORY LINK Exchange Rate Forecasts For British Pound Sterling vs Euro, NZ Dollar and US Dollar

The POUND STERLING (currency:GBP) performed weakly against the other sixteen most-actively traded global currencies during yesterday’s trading. The move out of Sterling-denominated assets looked to be technical rather than fundamental in nature, with investors taking profit following the UK unit’s recent strong run against the other majors. This morning’s UK labour market numbers are likely to be crucial to the Pound’s progress in the near-term – the markets expect a slight drop in the overall level of British joblessness. The Pound is forecast to trade on a NEUTRAL TO POSITIVE footing in the lead up to this release.

Yesterday’s comments from leading German politician Volker Kauder suggesting that his nations and the eurogroup should take a harder line in their debt negotiations with Greece threaten to stall the near-term improvement from the EURO (currency:EUR). Kauder’s assertion that Greece must fulfill the conditions of its bailout and that Greek policy makers need to change their ‘manners’ could hamper the shared currency moving forward. The outlook for the euro remains NEGATIVE and the GBP EUR exchange rate stands at 1.3894.

The US DOLLAR (currency:USD) has been the star of the show in the global currency markets during the past fortnight. The Buck’s outperformance has been based upon one premise – namely that the Federal Reserve is going to raise its key interest rate sooner rather than later. A tightening of monetary policy from the Fed is considered unlikely from tonight’s announcement, but any suggestion from the Bank’s Chair Janet Yellen that an interest rate increase is on its way could provoke further support for the Greenback. The outlook for the Dollar is therefore NEUTRAL TO POSITIVE and the GBP USD exchange rate stands at 1.4740.

The NEW ZEALAND DOLLAR (currency:NZD) suffered a real blow yesterday when the latest GlobalDairyTrade auction saw a 9.6% fall in the wholesale market price of whole milk powder – a key New Zealand export. The Kiwi had staged a pronounced recovery in the week leading up to this auction result as market participants priced-in the Reserve Bank of New Zealand’s more neutral policy statement. An interest rate increase in the USA tonight could further harm the Kiwi, so the outlook for the New Zealand unit is now NEUTRAL. GBP NZD stands at 2.0132.

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TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts