Currency forecasts for GBP, EUR, USD, CAD, AUD

Good morning. As I mentioned on Friday, the Pound has risen on the back of positive noises coming from the Brexit negotiations. In today’s post, I’ll have a quick look at some major currency pairs including Sterling, Euro, US Dollar, Canadian Dollar, Australian Dollar. I’ll look at what data releases are coming in the week ahead, and how these could affect Sterling exchange rates. Usually it’s these sort of economic data releases that move exchange rates. The expected result will already be priced into exchange rates, but if the actual result is better or worse than expected, the value of the respective currency will change.

Of course in the current climate, any Brexit news will probably have a bigger effect on exchange rates, as we saw last week. If you need to make a transfer or convert currency, then get in touch to find out how we can help. We provide exceptional rates of exchange, and can also offer a free consultation to give our views on the current market, and which way exchange rates may move. Enquire online here or email me directly alastair@currencyforecasts.co.uk

Sterling/Euro

Pound Euro remains just below €1.12 after rising towards the end of last week, as I outlined on Friday. We’ve already     had UK GDP figures this morning that were slightly better than expected. The Pound didn’t gain though, as at the same time we had industrial and manufacturing production numbers that were worse than expected, which cancelled out the decent growth numbers. Tomorrow morning we’ll see the latest jobless numbers. These are really good at the moment and the average earnings data will be watched closely to see if wages have grown by the expected 2.8%.

The most important releases come on Thursday, when both the Bank of England (BoE) and European Central Bank (ECB) announce their latest decision on interest rates and monetary stimulus. We’re not expecting any change from either bank, however we often see Pound/Euro rates move on comments that are made in the press conference. If EU data is poor this week, then it’s less likely the ECB will announce an end to the stimulus measures, and this could weaken the Euro. On Friday, the BoE governor Mark Carney gives a speech. When he speaks the Pound usually falls as he is notoriously negative about the impacts Brexit may have on the economy. He might announce an extension to his term too. Ultimately Brexit will be driving this pair, and anything deemed as progress will send the Pound higher, and vice versa.

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Sterling/Dollar

The Dollar has been very strong of late, which is why GBP/USD rates had fallen so low. This is in part due to the USD’s safe haven status. Investors globally are worried about emerging markets and trade wars, and due to this the Dollar has benefited and become more expensive. As with the Euro report, the most important event, other than any Brexit surprises, will be the BoE decision on Thursday. There’s not much data from across the pond, but some things to watch out for include US inflation on Thursday, Retail Sales and Industrial production numbers on Friday, and a measure of consumer sentiment at the end of the week.

GBPUSD remains around the $1.2950 level, due to the strong USD. It would take further Brexit developments to push this pair above $1.30.

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Sterling/Canadian Dollar

GBP/CAD is just above $1.70 at the moment. The pair rose a little last week due to the strength in Sterling. There’s not much coming from Canada this week so most movement in this pair will come from UK news – Brexit and announcements from the BoE.

You can read a detailed outlook of the UK data releases for the week ahead in the Euro section above.

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Sterling/Australia Dollar

GBP/AUD is only just below the highest rate we’ve seen in over 2 years before the referendum. Investors have been selling off emerging market currencies of late, and this has also weakened the AUD making it cheaper to buy. This is because Australia trades very closely with many emerging markets, so the jitters about global trade have made the Aussie Dollar much cheaper to buy. From Australia this week we’ll see business confidence data, consumer confidence data, and various wage and jobs numbers. If this data is good then it could halt the rise in GBP/AUD rates as the Dollar strengthens.

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