Schaeuble Comments Forecast to Push Pound Sterling AUD & NZD Toward Best Rates Higher

Published: Monday, 14 September 2015 10:30 BST - Written by Tim Boyer

STORY LINK Schaeuble Comments Forecast to Push Pound Sterling AUD & NZD Toward Best Rates Higher

Global Economy Threatened by Loose Monetary Policy: Foreign Currency Movement Forecast

Germany's Finance Minister Wolfgang Schaeuble hogged the headlines during the early part of Summer with his hardline statements regarding Greece’s debt crisis, and the Teutonic money man has hit the news once again during the weekend market shutdown.

The German Finmin suggested that the global economic recovery is threatened by the potential for a new asset bubble generated by the ultra-loose monetary policies followed by almost all of the world’s leading central banks since the last financial crisis of 2008 / 09.

Schaeuble stated that, ‘when we call for structural reforms in return for financial assistance, this isn't some narrow-minded mantra being repeated by people who have lost sight of the big strategic questions of the future. In fact, this may well be the most important long-term strategic question we face today.’

Federal Reserve Interest Rate Hike Speculation Predicted to Drive GBP to AUD, NZD Exchange Rates

These comments from the Finance Minister of the euroland’s leading economy are bound to be closely-heeded by market participants, and the suggestion that the global economy may be facing a fresh financial crisis of its own making at the start of the week when some analysts believe the US Federal Reserve is going to announce the first interest rate increase in a fresh tightening cycle has the potential to spook the markets.

Forex Forecast: Will British Pound to New Zealand Dollar, Australian Dollar Return to 2015 Best Rates?

Last month saw the VIX Index, which measures the number of protective ‘put’ orders placed by Chicagoan equities traders, spike to as high as 53.29 – its highest level since the Autumn of 2009 when venerable US investment bank Lehman Brothers ceased trading. The move higher for VIX, which is considered by analysts to be a gauge of levels of fear amongst market participants, coincided with a jump for the Pound Sterling Australian Dollar GBP AUD and Pound Sterling New Zealand Dollar GBP NZD exchange rates.


FX insiders forecast that if Schaeuble’s weekend comments cause a flight to safety which sees VIX eclipse last month’s highs, then both GBP AUD and GBP NZD could break to fresh multi-year highs, even before the US Federal Reserve makes its hotly anticipated policy announcement on Thursday.

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