Pound Sterling Forecast

Good morning readers,

With lots of data out today and tomorrow for the UK and other economies we will take a look at some of the releases and how it may affect your upcoming currency requirement. Scroll down the list to find the currencies that apply to you. If at any time you would like to speak with me regarding your future currency exchange then please do contact me at bma@currencies.co.uk

AUD - The first data release of the day was down under in Australia. They had their GDP figures released just after midnight and it showed a contraction in their economy. Now because their economy slowed more than expected it has increased the likelihood that the Reserve Bank of Australia (RBA) will cut interest rates again to bolster demand. This caused some AUD weakness overnight with the rates moving from 1.4861 to 1.4957.

Moving forward the RBA are under increasing pressure to weaken the Aussie Dollar as it is harming their exports. If further bad data comes out of Australia like employment figures then you will find that there will be further speculation of rate cuts which will continue to slightly weaken the Aussie Dollar. If you have Aussie Dollars to sell I personally feel  that with the current high levels against a range of other currencies you may miss the boat if you do not act fast. If you require buying Aussie’s in the near future hold tight as i feel that mid 1.50′s is around the corner. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

EURO – At 11.00 this morning Germany are releasing their factory orders and expectations are that we will see a big contraction on the previous months figures from 1.7% down to 0.5%. If the figure comes out at 0.5% or better then I will expect to see the Euro show some signs of strength.

The big story though is still Greece. Although starting to get very boring it will have a massive effect on Euro rates over the next month. The private sector still need to formally agree their debt swap which is meant to take place on Thursday and only once this is done can Greece agree to activate the 130 billion Euros. Then all eyes will be keen to see if they can meet the part repayment by the 20th of March. Any problem fulfilling the agreement could lead to a disorderly Greek default and potentially trigger further problems across the Euro Zone in Spain & Italy.

With an interest rate decision also looming tomorrow it will be very interesting to hear the comments that come out from super Mario the head of the ECB straight after the release. The markets will be listening very closely to his words and this can bring some of the most volatile times to GBP/EUR & USD/EUR rates. I would expect to see a range bound going forward from 1.1750/1.2050 for GBP and 1.29/1.3250 for the USD over the next couple of weeks. If you are buying or selling the Euro and you can achieve these levels or better I would capitalise. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

USD – For the US today there are a fair few data releases out from Mortgages approvals to the consumer credit change. The most important though for those with an actual exchange to make will be at 13.30 today in the form of the Nonfarm productivity. This shows the output per Hour of labor worked. Non-farm Productivity indicates the overall business health in the US, which has an influence on GDP. The level is expected to decline to 0.8% for Q4 last year.

You may have witnessed over the last few days that the USD has started to strengthen again. It has moved against the pound from 1.5950 down to 1.5709. The ongoing issues in Europe are once again benefiting the USD as the Dollar is being used as a safe haven option once again. With the Greek issue not yet sorted this trend could continue. This year the pound has been as low as around  1.5250/1.53. With sterling still trading at 5 cents higher now may be a good move to capitalise before we potentially see any further Dollar strength. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

NZD – At 8.00pm this evening the Reserve Bank of New Zealand (RBNZ) will be announcing their interest rate decision for this month. We are expecting rates to be held at 2.5% Sterling exchange rates have significantly strengthened by 10 cents in the last few weeks. Sterling spiked to above 1.94 yesterday but is today back down at 1.9240. Like in Europe straight after the rate decision the governor of the RBNZ Alan Bollard will give a speech on the state of New Zealand’s economy and what their stance is on any future policy. The markets will keep a close eye on this and there could be some volatile times during the speech. Email me at bma@currencies.co.uk to discuss when may be a good time for your own personal circumstances.

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