Pound Sterling Foreign Currency Exchange Rate Outlook vs EUR USD NZD - UK Local Election Results Fail to Shift Sterling

May 5, 2016 - Written by Minesh Chaudhari

STORY LINK Pound Sterling Foreign Currency Exchange Rate Outlook vs EUR USD NZD - UK Local Election Results Fail to Shift Sterling

The Pound has flopped against most of its peers recently, although reactions to the local elections have actually been lacklustre. More likely to have weakened the Pound is a calculated response to the week's poor PMI results.

The Pound's next notable movements may stem from the most unpredictable source of all - the ongoing UK local elections. Announcements of results are expected to be made over the course of tomorrow, Saturday and Sunday.

Pound Sterling (GBP) Exchange Rate Outlook Neutral to Negative

A poor showing from yesterday morning’s Markit / CIPS Purchasing Managers Index survey of the UK construction sector set the tone for the POUND STERLING (currency : GBP) on the day.

The British unit’s rally of the past three weeks, which was fuelled by elevated domestic inflation figures, now appears to have fizzled out, and the outlook for Sterling is now NEUTRAL TO NEGATIVE.

Euro (EUR) Exchange Rate Outlook Neutral

The EURO (currency : EUR) was held back by yesterday’s below-par March whole of eurozone Retail Sales data.

The downside for the shared currency was mitigated by an upward revision to February’s counterpart statistic.

This morning’s Economic Bulletin from the European Central Bank could prove market-moving; in the meantime, expect the euroland tender to perform on a NEUTRAL footing.

The Pound euro exchange rate stands at 1.2594.

US Dollar (USD) Exchange Rate Outlook Neutral to Positive

The US DOLLAR (currency : USD) has sharply improved against the Pound over the past 48hrs as investors sought out a safe haven for their assets.

Slightly ‘less bad’ than expected weekly Mortgage Application statistics and Trade Balance data also helped the Buck, but the main driver for the Dollar’s improvement was a far stronger than anticipated ISM survey of the Non-Manufacturing and Services sectors of the American economy.

The outlook for the Greenback is NEUTRAL TO POSITIVE and GBP USD stands at 1.4472.

New Zealand Dollar (NZD) Exchange Rate Outlook Neutral to Negative

The NEW ZEALAND DOLLAR (currency : NZD) once again struggled against the Pound yesterday.

The ‘risk-off’ trading environment on the session served to cancel out the positive effect of Tuesday’s marginal increase in the Whole Milk Powder hammer price at the latest GlobalDairyTrade online auction.

The Reserve Bank of Australia’s decision earlier this week to cut its headline interest rate may also weigh down the Kiwi moving forward by increasing investors’ expectations of a rate cut from the Reserve Bank of New Zealand.

The GBP NZD exchange rate stands at 2.1080 and the Kiwi is forecast to trade with a NEUTRAL TO NEGATIVE bias into the medium term.

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TAGS: American Dollar Forecasts Euro Forecasts New Zealand Dollar Forecasts Pound S Forecasts