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Pound Sterling Exchange Rate Outlook Poor vs Australian Dollar, EUR USD

June 10, 2016 - Written by Minesh Chaudhari

Sterling has flopped against its rivals overall today, on account of the latest forecasts for free UK access to the single market if it leaves the EU coming under fire.

Pound Sterling (GBP) Exchange Rate Outlook Neutral

The POUND STERLING (currency : GBP) put in a steady performance during yesterday’s session. News that the UK’s overall trade deficit had narrowed last month provided Sterling with an early-morning fillip, while data pointing to an increase in the level of British exports also helped its cause.

The afternoon publication of a poll pointing to a lead for the ‘Remain’ campaign in the EU Referendum stakes added to the upside for the Pound which is now expected to trade on a NEUTRAL footing in the short term.

Australian Dollar (AUD) Exchange Rate Outlook Neutral to Positive

The pronounced bounce in global commodities prices has favoured the export-driven AUSTRALIAN DOLLAR (currency : AUD) during recent months.

The closely-monitored Bloomberg Commodity Index was loitering just above the 70.00 threshold during the second half of January, but briefly broke back above the 90.00 level yesterday.

This move strongly favours the Dollar from Down Under, which is now forecast to trade on a NEUTRAL TO POSITIVE footing moving forward. The GBP AUD exchange rate stands at 1.9440.

Euro (EUR) Exchange Rate Outlook Neutral to Negative

Another strong set of German Trade Balance statistics, out yesterday morning, proved to be generally helpful to the EURO (currency : EUR) yesterday. While the euroland’s premier economy continues to perform with credit, investors will be willing to hold the shared currency.

However, concerns over the state of the euro area retail banks’ balance sheets prevail and perennial debt strugglers Greece are far from out of the woods yet.

For these reasons, the outlook for the euro is NEUTRAL TO NEGATIVE, while the GBP EUR exchange rate stands at 1.2777.

US Dollar (USD) Exchange Rate Outlook Neutral to Negative

Support for the US DOLLAR (currency : USD) has remained subdued following last Friday’s weak US job creation data.

Futures markets now suggest that there is only a 3.8% chance that the US Federal Reserve will opt to increase its headline interest rate on Wednesday, and perhaps even more worryingly for Dollar-holders, the same markets point to a near-40% chance that US interest rates will remain at their current level at the end of the year.

The Buck is therefore forecast to trade on a NEUTARL TO NEGATIVE footing moving forward and the GBP USD exchange rate stands at 1.4480.

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