Exchange Rate Forecasts for Today: British Pound, Australian Dollar, Euro and US Dollar

Modified: Monday, 10 March 2014 21:41 GMT
Written by: Gary Howes

Pound Sterling Live considers this morning's exchange rate forecasts issued by those analysts we follow closely.

For our latest 2014 exchange rate forecasts please be sure to visit our forecast section.

Global currency markets have entered a period of calm that was unbroken when Fed chair Yellen successfully kept to the Fed's official script on Tuesday and failing to spring any surprises on the market.

Subsequently the US dollar exchange rate complex ended largely flat to lower against the majors while positive investor sentiment also saw the JPY under performing across the board.

"Any marginal dollar resilience stemming from Yellen’s remarks were only observed against the EUR, CHF and the JPY while the antipodeans were fuelled by risk seeking behaviour," says Emmanuel Ng at OCBC Bank.

(Please Note: All quotes here are wholesale derived; your bank's FX rate is compromised by the large spread they charge. However, an indepndent FX provider has access to significant inter-bank liquidity, thus allowing them to deliver up to 5% more currency in some cases.Find out more.)

Euro pound exchange rate (EUR/GBP) forecast

"While resistance holds on closing basis at 0.8349, the cross remains vulnerable as bearish conditions persist. Support is at 0.8259 ahead of 0.8160." - UBS who are Bearish on the pair.

Analyst Piet Lammens at KBC Markets says:

"There are several factors to affect the balance for sterling trading. The jury is still out, but we don’t expect the BoE message to have a big negative impact on sterling. In a day-to-day perspective, we look out whether the 0.8350 resistance holds. If so, it would confirm that the downside of sterling against the euro is rather well protected. In a longer-term perspective, we maintain the view that the direction of sterling will be driven by the eco data rather than by the forward guidance (bis) from the BoE. We expect sterling to stay strong as long as UK data confirm the scenario that the recovery is on track."

Pound dollar exchange rate forecast (GBP/USD):

"The pair bounced sharply over the past few sessions from the main support at 1.6220. Resistance focus is at 1.6509, a break above which would be positive, opening the way to 1.6668." - UBS who are Neutral on the pair.

"All eyes will be on the BOE Inflation Report, with the forward guidance expected to be watered down somewhat by Carney. Although the pair has cleared the 55-day MA (1.6417), expect resistance to emerge around the 1.6500 vicinity. Expect a flattish/top heavy stance in the interim."

Euro dollar exchange rate forecast (EUR/USD):

"Ms Yellen’s testimony proved neutral/mildly positive for EUR-USD, as she confirmed that the tapering strategy will continue at a moderate pace. Only a full break above 1.37 may offer EUR-USD new momentum." - UniCredit Bank.

"With the Fed’s Yellen not straying significantly from her predecessor’s playbook just yet, the market may have to look towards the EZ for further cues on the pair with the ECB’s Draghi is scheduled to speak at 1530 GMT. Technically, the pair has failed to surpass its 55-day MA (1.3649) but interim support may surface around the 100-day MA (1.3612). Expect the market to remain slightly supported on dips." - Emmanuel Ng at OCBC Bank.

Australian dollar / US dollar exchange rate forecast (AUD/USD):

"There’s risk for extension of the recovery but from a broader perspective upside will be limited to resistance at 0.9086. Support is at 0.8907 ahead of 0.8730. Only a close above 0.9086 will be a major bullish development." - UBS who are Neutral on the pair.

"Yesterday’s positive read from the NAB business confidence indicators may be watered down by the slightly worse off Feb Westpac consumer confidence indicators released this morning. In the near term, the pair may remain underpinned by positive risk appetite levels ahead of the Chinese trade numbers are released later today. In the interim, we continue to remain positive on the pair within a 0.8980-0.9100 intra-day range." - OCBC Bank.