STORY LINK Exchange Rate Forecast - GBP, EUR, USD, AUD, NZD
TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions New Zealand Dollar Forecasts Pound Sterling Forecasts
POUND STERLING
The Pound weakened in trade this morning against the majority of majors. The most notable fall was a move to 1.2904 vs the Swiss Franc. The outlook for the Pound remains decidedly bearish despite the slight recovery this afternoon. This retracement represents a focus shift to more urgent matters occurring in the US. NEAR-TERM OUTLOOK ? NEUTRAL - NEGATIVE
US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6461
As discussed this morning, the main event was the Q2 GDP figures from the US at 1330. The growth figure was tepid at best with the annualized 1.3% figure coming in well below median forecasts calling for a 1.8% expansion in growth. The EUR/USD pair gained a cent in an hour and the cable pair GBP/USD has jumped 2 cents in the past two hours and is still rallying as we come to the close. Slower job growth as well as an almost non-existent move to income is holding back the US economy and could therefore potentially support the argument for a third round of QE. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.
EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1442
This morning?s Euro-Zone CPI estimate came in at 2.5%, slightly under the expected 2.7%. This is the lowest reading since February and means that the ECB may well hold on any further rate hikes for the near term. The ECB?s target inflation rate is 2% and as price growth comes back towards this target the ECB will be far less inclined to raise rates further in such stagnant growth conditions. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE
AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.4974
The Australian Dollar has rapidly retraced moving up 2.5 cents against the Pound back to 1.50. This is an aggressive move in a short space of time as we see wild swings in risk based sentiment. We would expect a move back towards the lows next week as the markets settle down. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE
NEW ZEALAND DOLLAR ? The Pound New Zealand exchange rate (GBP/NZD) is 1.8765
The New Zealand dollar maintains a position of remarkable strength against most of the majors, we would argue that it could be over extending and we may see some retracement before further downside. NEAR TERM OUTLOOK ? NEUTRAL To NEGATIVE
Source: http://www.currencynews.co.uk/forecast/20110729-649_exchange-rate-forecast-gbp-eur-usd-aud-nzd.html
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