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Foreign Currency Exchange Rate Forecast for Pound Sterling to Euro, USD, AUD

April 7, 2016 - Written by James Fuller

Pound Sterling (GBP) Exchange Rate Outlook Neutral to Negative

The POUND STERLING (currency : GBP) was given a boost by this morning’s Halifax House Price survey which showed a better than anticipated 2.6% increase in prices during the month to March.

However, the slight improvement for Sterling proved decidedly short-lived and by the middle part of the afternoon session, the UK unit was struggling once more thanks to Brexit and steel fears.

Analysts forecast that the Pound will trade on a NEUTRAL TO NEGATIVE footing in the lead-up to the June 23rd EU referendum.

Euro (EUR) Exchange Rate Outlook Neutral to Positive

The EURO (currency : EUR) continues to confound FX insiders who believed that the European Central Bank’s move to increase its controversial Quantitative Easing programme from €60bn per month to a heady €80bn per month would kill the shared currency.

The Sterling euro exchange rate has plunged to its lowest level for a year and a half this week and analysts forecast that there could be further losses to come for the pair.

Tomorrow morning’s German Trade Balance data form February could affect matters, but in the meantime, the shared currency is forecast to trade with a NEUTRAL TO POSITIVE bias.

The GBP EUR exchange rate stands at 1.2420.

US Dollar (USD) Exchange Rate Outlook Neutral to Positive

Last night’s US Federal Reserve minutes revealed that policymakers were split on their decision to keep rates on hold at its mid-March meeting.

The mere fact that the Fed countenanced a rate hike has supported the US DOLLAR (currency : USD) during today’s session and with futures markets pricing-in a likelihood that the Fed will hike rates before the year end, the outlook for the Buck is NEUTRAL TO POSITIVE.

The current GBP USD exchange rate stands at 1.4094.

Australian Dollar (AUD) Exchange Rate Outlook Neutral to Negative

The AUSTRALIAN DOLLAR (currency : AUD) has been thumped in the markets today, with the GBP AUD exchange rate jumping by 1.0%. The shift out of Aussie-denominated assets has been driven by the move out of risk-correlated assets by investors who fear that US interest rates may be set to increase several times more during coming months.

The fact that the Aussie has performed strongly during recent months leaves it open to further losses as market participants ‘take profit’, so the outlook for the ‘Dollar from Down Under’ is now NEUTRAL TO NEGATIVE.

GBP AUD stands at 1.8733.
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