The Pound to Euro exchange rate is currently trading at 1.2138
The Pound to US Dollar exchange rate is currently trading at 1.5880
The Euro to US Dollar exchange rate is currently trading at 1.3080
Risk sentiment appears to be ruling the roost at the moment and traditionally significant market data is finding it very difficult to percolate through traders’ strong risk-orientated standpoints. Sterling held up well yesterday as February’s UK Trade Deficit widened to £-8.8 billion, instead of the predicted £-7.7 billion. The Pound also came through virtually unscathed as Producer Price Index figures showed a slight easing in inflation. The annual output rate fell from 4.1% in February to 3.6% in March, and the annual input rate decreased from 7.8% to 5.8%. The inflation drop was not as pronounced as economists had predicted which was good for the Pound in the currency markets, but less hopeful for the Bank of England and their target rate of 2.0% CPI inflation by the end of the year.
China ‘suffered’ their worst quarterly growth for 3 years in the first 3 months of 2012. Their economy grew by ‘only’ 8.1% down from 8.9% in Q4 2011. This caused markets to turn from buying, more profitable but more risky, equities, commodities and commodity-related currencies, to placing their funds into the perceived safety of the US Dollar. The Euro retracted to 1.3127 against the Dollar, but the Pound managed to hold its position above 1.5900.
Pound to Euro currency predictions allow for a stronger Sterling surge if investors can get past the initial technical barriers around January’s high of 1.2163. If GBP/EUR manages to breach this resistance level then it could easily mount a rally up to 41-month highs around 2/2.5 cents higher.
Pound to US Dollar currency predictions hinge on central bank rhetoric; if the Bank of England are seen to soften their dovish outlook for the UK economy and put the brakes on further QE indefinitely then GBP/USD could continue 2012’s upward trend. However if the BoE increase their asset purchasing scheme further and the US Fed refrain from further QE of their own then an exchange rate above 1.6000 could be well off the mark for the currency pair.
Euro to US Dollar currency predictions show little support for the single currency as tensions in the Mediterranean member states are on the rise once more. Spain in particular is under the cosh and there have been talks of marijuana plantations and gigantic Las Vegas style strips to help alleviate the tremendous unemployment problems. A break below 1.3000 is possible if Eurozone governments are not seen as doing enough to deter the ongoing sovereign debt crisis in the region.