Latest Exchange Rate Forecasts
- Written by Will Peters
- Published: 09 March 2012
US Non-Farm Payroll numbers came in well ahead of analyst expectations at 227k - the consensus was for 210k.
The result? A stronger US dollar. This suggests investors are focusing not on the risk-on driver, which would have pressured USD, but on the outperformance of the US economy.
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A stronger economy would hint at no further quantitative easing which is seen as a negative for USD value.
It is this stronger economy that has resulted in an exchange rate forecast note from UniCredit which outs the GBP-USD at 1.50 by March 2013.
By June 2012 analysts are calling the exchange rate at 1.55 and 1.53 in December.
The exchange rate forecast note says sterling dynamics have proved choppy this year, but one factor is clear: although the BoE resumed its APP in February, the pound has been much more sensitive to swings in the global (and EMU) risk picture than to events or data at home.
The pound dollar exchange rate has again mostly tracked EUR-USD and this tight correlation should be difficult to challenge.
"Consequently, our FX scenario – still in favor of a weaker euro and a firmer USD against the other majors –again calls for a lower cable over time, below 1.55 and likely down to 1.50 by 1Q13," says UniCredtit.