Currency Forecasts for: GBP, EUR, USD, AUD, NZD, CAD

In today’s post I’ll take a detailed look at some of the major currency pairs that we offer for trade, including Sterling (GBP), Euro (EUR), US Dollar (USD), Australian Dollar (AUD), New Zealand Dollar (NZD), Canadian Dollar (CAD). For a quote on the exchange rate we can offer you, contact us today.

Pound Sterling (GBP)

It’s been a mixed few weeks for the Pound, with the currency facing some notable ups and downs as Brexit developments dominated market sentiment. The rejection of Theresa May’s ‘Chequers plan’ provided an initial setback for Sterling, before the currency clawed back some of its losses in the subsequent weeks as positive progress towards a deal helped to revive optimism the UK would avoid a no-deal scenario.

However, there is still plenty of work to do before a deal can be finalised, with the two sides still butting heads over what to do about the Irish border. This is likely to leave markets wary of the Pound until the uncertainty begins to clear, with GBP investors likely to become increasingly skittish the closer we get to the UK’s formal leaving date.

On the data front investors are likely to focus on the Bank of England’s upcoming policy meeting, with a more hawkish outlook from the bank likely in the wake of rising UK wage growth potentially lending support to Sterling.

Euro (EUR)

While Eurozone data has continued to drag on the Euro over the last month, it was concerns over Italy’s controversial budget plans which proved to be the most limiting factor for the single currency in recent weeks. This came as Rome announced it would run a budget deficit of 2.4% in 2019, leading to clashes with Brussels as this would flout the EU’s 2% limit, as well as prompting concerns about its impact on Italy’s already sizable debt pile.

However its wasn’t all doom and gloom, with the Euro finding some brief respite as European Central Bank (ECB) President Mario Draghi spoke of the Eurozone’s ‘vigorous pick-up in underlying inflation’. The Euro’s performance in the weeks to come will likely be dependent on the performance of the Eurozone economy, with the single currency facing further losses unless data from the bloc begins to improve.

On top of this Brexit may begin to exert a great influence over EUR exchange rates over the next couple of months as markets mulled over what impact a no-deal exit by the UK could have on the rest of the EU.

US Dollar (USD)

Another strong run of US economic data has seen the US Dollar remain well positioned against its currency peers over the last few weeks. Further bolstering the appeal of USD was the Federal Reserve’s decision to raise interest rates at its September policy meeting as well as indications that rates could rise a further three times over the next twelve months.

The prospect of further rate hikes drove an influx of investors to the US Dollar as analysts began to express concerns about the knock on effects rising US interest rates could have on global growth. Over the next couple of weeks however attention in the US is likely to turn back towards domestic politics as markets gear up for the US midterm elections.

We could see some notable weakness in the US Dollar if the Republicans lose control of both chambers of Congress as it potentially hampers Donald Trump’s ability to push through his economic policies.

Australian Dollar (AUD)

Growing geopolitical uncertainty, alongside concerns over accelerating US interest rates drove markets to shun risk-sensitive currencies such as the Australian Dollar last month.

Coupled with a fall in commodity prices this propelled the ‘Aussie’ to a new two-year low, despite a broadly upbeat outlook from the Reserve Bank of Australia (RBA) in its October policy decision. With analysts predicting another robust inflation reading, Australia’s third quarter CPI figures could provide some much needed support to AUD later in the month.

However with global uncertainty only expected to grow over the remainder of 2018 it’s highly likely that the Australian Dollar will witness further volatility in the weeks to come.

Canadian Dollar (CAD)

Robust inflation, stronger-than-expected domestic GDP igures and the signing of a new NAFTA replacement helped the Canadian Dollar close out September on a high, recouping the majority of the losses suffered in August.

It didn’t take long for things to begin to sour for the ‘Loonie’ however, with the oil-sensitive currency quickly falling back as volatility in crude prices clouded market sentiment.

The Bank of Canada’s upcoming rate decision offers an opportunity for CAD exchange rates to rally once more however, with the slim possibility of a rate hike likely to keep investors on their toes.

Getting the best Exchange Rates

If you’re reading this blog then there’s a good chance you’re looking for the best rates of exchange. In addition to the market commentary that we provide, we also work for one of the UK’s largest currency brokerages. We can help clients that need to convert funds and our rates are exceptional. Even if you are already using a broker, you could save thousands of Pounds.

To find out more or get a quote, get in touch.

 

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