China ?QE? Programme Forecast to Bolster AUD NZD CAD vs Pound Sterling GBP

Published: Tuesday, 13 October 2015 07:00 BST - Written by James Fuller

STORY LINK China ?QE? Programme Forecast to Bolster AUD NZD CAD vs Pound Sterling GBP

Foreign Exchange News and the Latest Currency Forecasts

Far Eastern share markets recorded strong gains last night following the weekend news that China’s central bank intends to expand a pilot scheme to expand provision of liquidity to the nation’s retail banks.

Analysts were quick to label the scheme as China’s version of Quantitative Easing due to its similarity to the fully-blown QE programmes followed by the Bank of England, US Federal Reserve and European Central Bank during recent years. The scheme, which is currently being tested in the Shandong and Guangdong provinces of China, sees regional retail banks lodge various illiquid assets, with the People’s Bank of China in return for cash advances.

Pound Sterling NEWSFLASH: Losses Predicted for GBP to AUD, NZD, CAD Exchange Rate Trading

The immediate effect of the announcement of increased levels of liquidity for China’s vast credit markets saw Shanghai’s benchmark SSE Composite equities index gain 3.28% during Monday’s Asian session, while Hong Kong’s leading Hang Seng index moved higher by over 1.0% with companies with Chinese interests leading the charge. The Chinese liquidity enhancement programme is forecast by FX analysts to help support the export-driven Commodity Dollars, with losses now predicted for the Pound Sterling Australian Dollar GBP AUD, Pound Sterling New Zealand Dollar GBP NZD and Pound Sterling Canadian Dollar GBP CAD exchange rates.

EUR Exchange Rate Outlook Now: Euro to Fluctuate on German Sentiment Data

Looking ahead, the next key risk event of note comes later this morning in the form of the publication of the latest German ZEW Sentiment Index. Analysts forecast that the key gauge of confidence levels in the euroland’s premier economy will show a considerable drop-off from last month’s edition. Such an outcome is forecast to end the strong levels of support which the euro (currency : EUR) has enjoyed during recent weeks. The improvement for the shared currency has seen the Pound Sterling euro exchange rate (GBP EUR) drop down into the 1.3400s but the euro now appears susceptible to a bout of technical selling pressure.

Chinese Inflation Forecast to Drive FX Conversion Rate Movement

Moving forward, the latest Chinese inflation figures, due for publication in the early hours of tomorrow morning, are likely to be seminal in forming FX insiders’ opinion on the likely next move from the People’s Bank of China, especially in light of the weekend news from Beijing.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Canadian Dollar Forecasts Daily Currency Forecasts