Exchange Rate Outlook: GBP/EUR Headed for Five-Day Gain

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Pound Sterling

A report detailing a 1.4 per cent month-on-month increase in UK house prices helped the Pound extend gains against the Euro early into European trading. Sterling could rally further as trading continues if UK construction PMI shows another month of expansion, as expected by economists.

GBP/EUR is trading in the region of 1.2056 and GBP/USD is trading in the region of 1.6443

US Dollar

Yesterday the ‘Greenback’ consolidated gains against peers like the Pound as a stream of better-than-forecast US data releases supported the case for the Federal Reserve tapering stimulus further when it meets this month. Later today Fed Chairman Ben Bernanke will be speaking at the Economics Conference in Philadelphia and the tone of his comments could inspire US Dollar volatility before the weekend.

USD/GBP is trading in the region of 0.6081 and USD/EUR is trading in the region of 0.7332

Euro

In spite of encouraging manufacturing PMI reports for Germany and the Eurozone, the Euro maintained a bearish relationship with the Pound and US Dollar throughout the local session on Thursday. As the week draws to a close the common currency is in line to record a weekly decline against both Sterling and the ‘Buck’.

EUR/GBP is trading in the region of 0.8292 and EUR/USD is trading in the region of 1.3639

Australian Dollar

With investors speculating that the ‘Aussie’s recent decline was excessive, the Australian Dollar was able to recover some ground overnight and enjoy its most significant five-day gain against the ‘Greenback’ for two months. The South Pacific asset continued to trade higher even as a gauge of non-manufacturing PMI for China declined.

AUD/GBP is trading in the region of 0.5461, AUD/EUR is trading in the region of 0.6588 and AUD/USD is trading in the region of 0.8988

New Zealand Dollar

A lack of economic news for New Zealand and a disappointing non-manufacturing PMI report for China, one of the latter nation’s main trading partners, left the ‘Kiwi’ softer against the US Dollar at the close of local trading.

NZD/GBP is trading in the region of 0.5020, NZD/EUR is trading in the region of 0.6004 and NZD/USD is trading in the region of 0.8254

Canadian Dollar

The Canadian Dollar was able to recover ground against its US peer yesterday in spite fluctuating commodities. A report detailing expansion in Canada’s manufacturing sector lent the ‘Loonie’ support and the currency was also able to trim losses against the Pound.

CAD/GBP is trading in the region of 0.5717, CAD/EUR is trading in the region of 0.6892 and CAD/USD is trading in the region of 0.9400

These exchange rates were correct as of 9:15 am

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.