Exchange Rate Forecasts

July, 2006

The Dollar makes further gains amid speculation that the Fed will need to continue raising U.S interest rates in order to cope with rising prices

Tuesday, July 18th, 2006

The positive sentiment surrounding the Dollar continued yesterday as we surged under 1.8200 versus the Pound for the majority of the session. The conflict in the Middle East is seemingly fuelling the recent rally as investors turn to the Dollar as a relative safe haven amid times of uncertainty and relinquish any “risky” assets. However, [...]

The Dollar strengthens under 1.8300 against the Pound ahead of a week of significant inflationary data in the States and in Europe

Monday, July 17th, 2006

Following on from last week, The Euro and the Dollar came under pressure amid the geopolitical tensions in the Middle East with investor’s turning to the Swiss Franc and the Pound as relative safe havens. However, on Friday the Dollar shrugged off poor retail and consumer confidence data to close under 1.8400 against the Pound [...]

The Dollar may come under further pressure amid the turmoil in Nigeria and the violence in the Middle East

Friday, July 14th, 2006

The Pound made significant gains against the Dollar but particularly the Euro yesterday despite a sparse supply of important data released in the UK or the rest of Europe. Cable was relatively unchanged before the BCC quarter economic survey for the second quarter even-though the price of crude oil rocketed to $75 a barrel overnight [...]

The Dollar stages an unlikely rally as the U.S Trade Deficit unexpectedly widens by much less than forecast at $63.8 Billion

Thursday, July 13th, 2006

The Pound suffered further losses against the Dollar yesterday as UK jobless claims rose by slightly more than expected in June and reached the highest level in four years last month, which dampens inflationary pressures and increases speculation that the Bank of England will continue to hold interest rates at 4.50%. The number of people [...]

The Pound comes under further pressure as the UK Trade Deficit unexpectedly widens in May

Wednesday, July 12th, 2006

The Pound came under some pressure yesterday as the UK Trade Balance showed that the deficit in goods and services actually widened in May, which suggests that UK exports will be unable to fuel economic growth in the second quarter. The gap increased to £6.8 Billion, the biggest increase since February, despite forecasters anticipating that [...]

The Pound weakens against the Dollar as UK Producer Prices decline in June while the Housing market continues to show signs of growth

Tuesday, July 11th, 2006

There was a real mixed bag of UK data released yesterday and as a result, the Pound dropped by 0.4% versus the Dollar at the close last night to trade in and around 1.8400. Firstly, the Producer Price Index came out slightly under expectations with output prices accelerating by 0.1% in June, which takes the [...]

The Dollar retreats back towards 1.8500 against Sterling as the U.S economy adds fewer jobs than expected in June

Monday, July 10th, 2006

Following on from last week, the Dollar declined against the majors on Friday after the U.S monthly job report showed that the economy only added 121,000 jobs in June, despite forecasters predicting that Nonfarm payrolls would increase beyond 150,000 last month. The unemployment rate remains unchanged at 4.6% but it seems that the seemingly buoyant [...]

The ECB keep interest rates on hold at 2.75% but Trichet maintains that the central bank will remain “vigilant” on inflation

Friday, July 7th, 2006

The Pound remained relatively unchanged yesterday after the Bank of England announced that UK interest rates would remain on hold at 4.50% for the eleventh month in succession in July and we will have to wait until next week to gauge how the seven strong committee voted. It was widely anticipated that UK rates would [...]

The Dollar makes gains against the Pound after the ADP Employment report shows the economy added a whopping 368,000 jobs in June

Thursday, July 6th, 2006

Without doubt, the most significant event this week will take place at midday when the European Central Bank announce their latest stance on euro-zone interest rates and it is widely anticipated that the ECB will continue to adopt a more measured, cautious approach this month despite six members of the governing council publicly giving their [...]

The Euro strengthens further against the Dollar ahead of the PMI services report

Wednesday, July 5th, 2006

Over the past couple of weeks, several members of the ECB’s governing council have publicly reiterated their desire for the Central bank to become more aggressive towards monetary tightening as growth in the economy begins to gather momentum. The Ifo business climate index in Germany has seemingly shrugged of the threat of global inflationary pressures [...]

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