Exchange Rate Forecasts

Sterling had a dip on yesterday’s weak Trade Balance figures, which showed the UK deficit for November rising to new highs at £5.966Bn. We remained weak against the Euro, but recovered against an even weakner dollar so that cable finished the day flat, having bounced precisely from our support level at 1.7512. This leaves what’s [...]

The dollar continues to drift higher as we await a string of data releases on Thursday. In the meantime, with Wednesday being another dataless session I would expect more of the same. Sterling has also been drifting higher against the Euro, but this morning we are trading lower ahead of UK Trade Balance figures due [...]

The British Retail Consortium reported a 2.6% rise in UK retail sales over Christmas, well above the 1.5% expected. This should be positive for sterling. The survey had shown seven straight months of falls leading into November, which produced a 0.8% gain as shoppers geared up for Christmas. French Manufacturing Output was up by 2.6%, [...]

Non-farm payrolls came in at 108k Vs 206k expected, showing that the US economy added fewer jobs than expected during December. The dollar duly solf off, with both cable and EURUSD touching their respective long term trend supports (currently resistance) from below during the session. These lie at 1.2175 and 1.7730. Sterling is having a [...]

US jobless claims hit a five year low last week, with only 291,000 claims versus 326,000 in the previous week. Non-farm payrolls are expected to come in around +208,000 when they’re released at 13:30 today. Interestinly, despite the unexpectedly low unemployment rate, and positive ISM figures, the dollar failed to rally yesterday, which gives us [...]

Dollar weakness continued yesterday, but momentum appears to have dried up, so we could have a dull day today ahead of US employment data at 13:30. More to be said on the GBPEUR side, with UK Service Sector PMI at 09:30 and EMU Retail Sales at 10:00. GBPEUR is challenging the 1.4500 support. A decisive [...]

The minutes of the December Fed’ meeting were released yesterday, revealing that only two further rate rises are likely. Inflation appears to be under control, and pressure for higher rates is moderating. The dollar reacted predictably, selling off sharply to 1.7500 and 1.2080. We could see further dollar weakness over the short term as markets [...]

Not much has been happening over the break, except for a return of sterling weakness which has seen cable fall back to 1.7200, GBPEUR to 1.4550. The underlying reason for the weakness is twofold. Firstly, the market is pricing in the likelyhood of an interest rate cut in the UK early this year. Secondly, a [...]