Medium Term Gains Forecast for AUD, NZD, CAD Against British Pound Sterling

Modified: Friday, 5 June 2015 15:44 BST - Written by John Cameron

STORY LINK Medium Term Gains Forecast for AUD, NZD, CAD Against British Pound Sterling

The high-yielding Commodity Dollars received a much-needed boost earlier today following comments from the International Monetary Fund (IMF). Speaking yesterday, IMF Chief Christine Lagarde offered some free advice to US Federal Reserve policymakers, suggesting that they should delay an increase to America’s key interest rate until 2016 at the earliest. Prior to Lagarde’s comments, the consensus view amongst investors was that the cost of borrowing in the States would be on the rise later this year, with December representing the most probable month for a hike. However, Lagarde’s observation of ‘pockets of vulnerability’ in the world’s premier economy alongside her assertion that, ‘deferring rate increases would provide valuable insurance against the risk of disinflation, policy reversal and ending back at zero policy rates,’ could help the Australian Dollar (currency:AUD), New Zealand Dollar (currency:NZD) and the Canadian Dollar (currency:CAD).

Analysts forecast that the prospect of continued low interest rates in the largest global export market is likely to prop up these risk-driven tenders for months to come. In the short term, however, AUD, NZD and CAD have leaked support on the day thanks to market jitters that Greece may not be able to find the €1.5bn+ which it owes the IMF before the end of this month.

Meanwhile, the Pound Sterling (currency:GBP) has struggled to break into positive territory against all of the most actively traded global currencies with the expectation of the high yielders. The UK unit has been weighed down by yesterday’s lacklustre domestic services sector survey and this afternoon’s confirmation that UK interest rates will be maintained at their current record low of 0.50% has done little to excite Sterling-watchers.

Elsewhere, yesterday afternoon’s weekly US jobs data slightly beat analysts’ expectations, with the Continuing Claims element dropping to 2,196,000 and the Initial Jobless Claims number printing at 276,000 versus an expected 278,000. Even still, the US Dollar (currency:USD) shipped support against the British Pound Sterling, with the GBP USD exchange rate spiking to as high as 1.5441 on the day.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts