Sterling forecast and currency update against USD EUR AUD ZAR NZD CAD and general market view
Again still being one of the best of a bad bunch the Pound is remaining fairly stable against most of the majors – The NIESR (National Institution of Economic and Social Research) Britain’s longest established economic research institute with over 60 years doing so. Their predictions tend to be fairly close to the mark and are well respected so we may see a drop for the Pound should they place the U.K further back in recession.
The Greek election will be a major point in the Eurozone’s history and it looks like the Anti-Austerity party just about have their heads in front. Should this continue to be the case then we may be looking at seeing the first economy leaving the Euro as no negotiation appears to be the stance from Germany and that is exactly what this party are looking for. Greece may then essentially be declared bankrupt and in my opinion this would signal plans being put into action for them leaving the Euro.
On top of this we have the latest news on the banks in Spain. They have been allocated up to 100 Billion Euros however we saw roughly 66 Billion Euros leave Spanish banks alone in March so I personally only see this as putting buckets of water into a boat
which clearly has much bigger holes in it… Unless severe action is taken that boat will eventually sink.
As we have seen of late these currencies are being highly effected by investors attitude to risk and seeing further problems for Europe could well lead to these becoming even more jittery. I personally can see a spike occurring against these currencies for
the Pound if the Greek election goes in favour of the Anti-Austerity party.
The USD benefited greatly over the past few weeks as concerns regarding the Eurozone grew and personally I think we could see this happen again in the next week or so (depending on election results) I doubt we will see rates creep back up to the 1.60 mark for some time now unless we see some highly positive news for Europe or some very negative comments from the states.