Pound Sterling (GBP) FX Forecast against EUR USD CHF - Poor Outlook for Foreseeable Future

July 21, 2016 - Written by James Fuller

STORY LINK Pound Sterling (GBP) FX Forecast against EUR USD CHF - Poor Outlook for Foreseeable Future

The Pound is unlikely to be in high demand in the near-term, on account of the latest domestic data concerning July PMI flashes printing extremely poorly.

Sterling may be in for a low close to the week, should tomorrow's potentially negative PMI printings gel with today's exceptionally bad retail sales results for June.

Pound Sterling (GBP) Exchange Rate Outlook Negative

A rare piece of encouraging news for the POUND STERLING (currency : GBP) saw the UK unit record a limited gain against most of the other sixteen most actively traded global currencies yesterday.

An unexpected drop in the overall level of domestic joblessness helped Sterling, but fears over the effect which Brexit uncertainty make have on the UK economy mean that the outlook for the Pound remains NEGATIVE.

Euro (EUR) Exchange Rate Outlook Neutral to Negative

The EURO (currency : EUR) was not helped by this morning’s official data which revealed that the euroland’s current account surplus dramatically decreased during the month of May.

The plunge from April’s showing of €36.1bn to a relatively lowly €15.4bn suggests that the region is beginning to suffer from a decrease in global demand.

Today’s European Central Bank policy decision is unlikely to prove market-moving, so the outlook for the shared currency remains NEUTRAL TO NEGATIVE. The GBP EUR exchange rate stands at 1.1960.

US Dollar (USD) Exchange Rate Outlook Neutral to Positive

The US DOLLAR (currency : USD) continues to benefit from increasing expectations regarding the timing of the next Federal Reserve interest rate increase.

Following a run of better than anticipated US economic data, futures markets now price in a better than 50% chance that the cost of borrowing Stateside will be increasing before Christmas.

The Buck is therefore forecast to trade on a NEUTRAL TO POSITIVE footing moving forward and the GBP USD exchange rate stands at 1.3174.

Swiss Franc (CHF) Exchange Rate Outlook Neutral

The safe-haven SWISS FRANC (currency : CHF) has enjoyed a Bull Run against the Pound and other major currencies since the UK voted for Brexit last month.

However, with global stock markets continuing to record strong gains and yesterday’s disappointing ZEW Survey showing much lower expectations regarding the near-term prospects of the Swiss economy, the future prospects for the Franc are NEUTRAL.

The GBP CHF exchange rate is 1.3010.

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TAGS: American Dollar Forecasts Euro Forecasts Pound Sterling Forecasts Swiss Franc Forecasts