Exchange Rate Forecasts

Ahead of today's data we see the pound euro exchange rate is 0.02 pct down on last night's closing rate at 1.1697, the pound US dollar exchange rate is 0.03 pct higher at 1.5043, the pound Australian dollar exchange rate is 0.7 pct higher at 1.5756.

(These rates come from the wholesale markets - your bank will affix their own discretionary spread to the figures. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering more currency. Find out more here.)

However, UniCredit Bank say the CBI data "is unlikely to offer cable much relief at the moment. Speeches by the BoE's Bean and Haldane this morning are not expected to have any great impact either. A break below 1.50 for cable and stabilisation above 0.86 for EUR-GBP still remain the two main tests at present."


Live EUR/GBP Chart


     

Exchange Rate
Forecasts 2013:

USD
GBP
EUR
AUD
NZD
JPY
CHF
CAD
SEK
NOK

Indeed, technical considerations are likely to dictate the outlook for the British pound today.

We see the GBP/USD under continued pressure with further declines to 1.501  1.4975 possible.

Analysts at Trading Central are meanwhile forecasting the pound to enjoy gains against the euro saying the EUR/GBP is under pressure. They favour short positions below 0.857 with 0.853 and 0.851 in sight.

Barclays: Carney unlikely to prompt further quantitative easing

Currency markets continue to be driven by central bank policy decisions - particularly around printing money i.e quantiative easing.

Some argue that the pound is under pressure as forecasters predict the incoming governor, Mark Carney, at the Bank of England will restart the money printing process.

In a pro-sterling development analysts at Barclays say this is unlikely:

The MPC is a one-member-one-vote committee, not a consensual body.

"Given that Governor King is already supporting looser policy, assuming that Mr Carney is also in favour of extending QE (a position that cannot wholly be taken for granted as he has so far not commented on the UK policy outlook) the voting arithmetic is unchanged.

"As things stand, the governor is not the marginal voter.

"We therefore think the chances of more QE rest on economic developments, and our view remains that in our baseline case of a gradual acceleration in activity there will be no more QE, but that any stalling of the recovery will prompt the MPC into further action.