Brexit Pound Sterling Currency Forecast vs EUR USD NZD - Situation Worsens in UK

July 1, 2016 - Written by John Cameron

STORY LINK Brexit Pound Sterling Currency Forecast vs EUR USD NZD - Situation Worsens in UK

Sterling has been a highly undesirable choice recently, on account of the Chancellor, George Osborne, slashing his hopes of getting a budget surplus by 2020.

Pound Sterling (GBP) Exchange Rate Outlook Negative

The value of the POUND STERLING (currency : GBP) continues to fall in the markets following the surprise vote in favour of Brexit by the UK electorate last week.

Political uncertainty, with both major British parties lacking any clear leadership, further hinders the Pound as does Bank of England Governor Mark Carney’s suggestion yesterday that domestic interest rates may be cut next month.

Sterling is forecast to trade on a NEGATIVE footing in the short to medium term.

Euro (EUR) Exchange Rate Outlook Neutral to Negative

The EURO (currency : EUR) has convincingly outperformed Sterling during the week which has following the UK European Union Membership referendum.

However, the decision by Britain to Brexit places pressure on the EU and rumours are rife that one or more of the remaining 27 nation states in the Union may stage their own exit referendum.

This morning’s whole of eurozone manufacturing data was encouraging, but the outlook for the shared currency is NEUTRAL TO NEGATIVE. The GBP EUR exchange rate stands at 1.1944.

US Dollar (USD) Exchange Rate Outlook Neutral to Positive

The US DOLLAR (currency : USD) has surged to a 31 year high against the Pound this week as investors abandoned Sterling following last week’s vote for Brexit.

However, the vote to leave the European Union from Britain has had a negative effect on investors’ expectations regarding the potential for a US Federal Reserve interest rate hike this year.

Futures markets now price-in an almost 80% chance that the cost of borrowing stateside will remain at 0.50% by the end of the year and this sea-change in expectations is expected to curb support for the Buck moving forward.

The Pound Dollar exchange rate stands at 1.3240 GBP USD and the outlook for the Greenback is NEUTRAL TO POSITIVE.

New Zealand Dollar (NZD) Exchange Rate Outlook Neutral to Positive

Official numbers published overnight in China showing that activity levels in the nation’s vast manufacturing sector were teetering on the brink of contraction last month have provided the NEW ZEALAND DOLLAR (currency : NZD) with a considerable headwind today.

China remains by far the largest market for New Zealand’s exporters so this was bad news for the Kiwi, but whilst Auckland property prices continue to track Northwards, making a RBNZ rate cut unlikely, the outlook for the Kiwi remains NEUTRAL TO PSOITIVE,.

The GBP NZD exchange rate stands at 1.8508.

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TAGS: American Dollar Forecasts Euro Forecasts New Zealand Dollar Forecasts Pound S Forecasts