US Dollar (USD) Forecast to Rally Against Majors, Pound (GBP) Remains Strong

Published: 7 Jul at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany, Japan, South Africa,

Pound Sterling (GBP)

With a weak US Dollar and Euro, Sterling has been able to be bullish in the currency market.; Hhowever, recent speculation regardingfor the Federal Reserve raising interest rates has caused economists to hypothesis that the ‘Buck’ is on the rise. Tuesday will see the publication ofpublish data for UK Industrial Production and Manufacturing Production, which are both forecast to rise, along with the Gross Domestic Product Estimate for June. If the UK produces more favourable results, as it has done in recent weeks, the Pound will continue to be a strong contender against the other currency majors as interest rate hike speculation grows.

US Dollar (USD)

The US Dollar has pulled back some of its recent losses against the majors in the aftermath of recent positive recent employment data, thereby furthering which increased anticipation surrounding the prospect of for the Fed to raisinge interest rates. An expert in the field, Garry Dean stated: ‘Until that payrolls number came out the sense was that the Fed was likely to maintain interest rates at a very low level, and have an extended period of low interest rates.’ Furthermore the US Dollar is performing particularly well against Asian currencies, rising by 0.7% against the Japanese Yen (JPY) in the last week. Forex expert Bart Wakabayashi speculates that in the short term: ‘It wouldn’t be surprising to see a rise toward 102.50 Yen.’

Euro (EUR)

Monday has brought an unforeseenun-forecast drop in German Industrial Production, causing yet another setback for the Euro. May’s figure was recorded as decline of -1.8%, following a previous dip of falling further than the previous -0.3%, and was blamed predominantly on a lack of manufacturing and construction productivity. This doesn’t bode well for the struggling Euro, causing talk of prolonged low interest rates. Vice President at the ECB, Benoit Coeure commented: ‘Rates will stay very close to zero for a long period. We are taking care of financial stability.’ The Euro is currently trading against the US Dollar at 1.3584.

Canadian Dollar (CAD)

Canada will publish data on Monday for the Ivey Purchasing Managers Index data on Monday, which is currently forecast to rise from the former 48.2 to 52.5 and the New Housing Price Index on Thursday. However Friday will be the most influential day for the ‘Loonie’ with the Canadian Unemployment Rate statistics and New Change in Employment figures published. If these figures prove fruitful for Canada, the ‘Loonie’ is speculated to plausibly reach the 95 cents region in the near future. However Canadian Dollara strength is damaging the has been enjoying the weaker Canadian Dollar nation’sin an attempt to become a more prominent price contender in the export market. Speculation amongst economists that the Canadian Dollar needs intervention by the Bank of Canada is increasing. BMO Capital Markets forex expert Doug Porter suggested: ‘It may be time to drop the caution. When every other central bank is doing what it can to cut its currency, you can’t be bringing a knife to a gunfight, which is what the Bank of Canada is basically doing.’

Australian Dollar (AUD)

The ‘Aussie’ suffered a period of weakness last week as RBA governor Glenn Stevens quashed itsany upward trajectory by claiming that the currency was overvalued. However, economists predict that further negative discussion of the ‘Aussie’ by the RBA will have a limited effect on the strength of the currency – which was previously speculated to reach parity or trade high this year against the ‘Greenback’. An expert in the field, Todd Elmer, stated: ‘By shifting to a neutral bias earlier this year and since emphasising that rates are to be on hold for an extended period, the RBA is simply providing investors with better entry levels for Australian Dollar longs and we suspect there will be less and less impact from successive rounds of verbal intervention.’

New Zealand Dollar (NZD)

With speculation mounting that last week’s employment gain will bring forward the timeline for for the US interest rate hikes, the ‘Kiwi’ took a back seat in the currency pair, trading lower against the ‘Greenback’it. Trader Garry Dean said: ‘The market is following on from that payroll data, we saw the US Dollar close the week on bid tone and that’s really followed through and traders are wondering if early on the week we might just get a continuation of that US Dollar strength.’ New Zealand has a fairly quiet week by way of influential data, however Wednesday will see the release ofpublish the New Zealand Performance of Manufacturing Index which could help the ‘Kiwi’ in its struggle against a strengthening US Dollar. The ‘Kiwi’ is currently trading at 0.8727 against the US Dollar.

South African Rand (ZAR)

The Rand is continuing its period of high volatility and fluctuations, with metal strikes embarking on itstheir second week. After already suffering a prolonged five month platinum mining strike, the metal strike hasn’t enabled the Rand to gain any stability. A trader for Johannesburg Investment Bank stated: ‘Our South African fundamentals are very much Rand negative, what with the strikes.’ With no positive outlook for the Rand until the work stoppage is concluded, the Rand looks set to remain low against other majors, and is currently trading at 0.0928 against the ‘Greenback’.
As of Monday, 7th July 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2592, GBP USD exchange rate was 1.7134, GBP AUD exchange rate was 1.8284, GBP NZD exchange rate was 1.9588, GBP CAD exchange rate was 1.8305, GBP JPY exchange rate was 174.4853, and GBP ZAR exchange rate was 18.4497.

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