FX Forecasts for British GBP/EUR | EUR/USD | Canadian and Australian Dollars

For reference: Exchange rates on Thursday:

• The pound to euro exchange rate is 0.17 pct lower on the previous day's closing level at 1.2649.
• The pound dollar exchange rate is lower at 1.7120.
• The Australian to US dollar rate is unchanged at 0.9368.
• The US to Canadian dollar exchange rate is down at 1.0737.

Be aware: The above quotes are taken from the wholesale markets, the numbers will attract a spread when passed on to consumers. An independent FX provider will however seek to undercut your bank's offer and deliver a rate that could yield up to 5% more currency in many cases. Please learn more.

Pound to euro exchange rate forecast: Longer-term GBP could hit 1.28 EUR

Bill McNamara at Charles Stanley comments on the longer-term prospects of the pound euro rate:

"The UK currency also traded in a tight range last week, at the end of which is was just fractionally lower against the euro.

"Its latest price action suggests that it has entered a period of consolidation following its head-long charge up to 1.26 and this could yet result in a degree of profit-taking before it is in a position to push higher again. The medium-term
upside target is still 1.28."

Pound to dollar exchange rate forecast: Support ahead

The GBP/USD is off its July 4th highs which saw it achieve its best levels of the year.

Analyst Emmanuel Ng at OCBC Bank tells us that support against further losses is however likely:

"GBP-USD shifted slightly lower on Friday in the wake of disappointing May construction data with the 1.7200 resistance still sitting secure while visible support may emerge on approach of 1.7060.

"On the CFTC front, net leveraged GBP longs were reduced slightly in the latest week with net positioning still looking stretched with respect to net open interest."

Euro dollar forecast: EUR to remain comfortable

"We expect EUR to be comfortable range trading between 1.35 and 1.37 until there is a catalyst to force it lower. We hold a year‐end forecast of 1.30," says forex analyst Camilla Sutton at Scotiabank in a note to clients.

From a longer term perspective, McNamara says:

"Despite the volatility evident in other equities last week the currency markets were strangely becalmed and most of the pairs mentioned in this note registered barely any change over the five-day period.

"The single currency, for example, ended the week 0.01% lower and, as the chart below demonstrates, this leaves it firmly in the midst of its recent trading range (where support has been evident at around 1.35 and resistance has been kicking in when it reaches 1.37). In the short-term at least, this congestion band looks set to continue."

Australian + Canadian dollar forecasts: Weakness ahead?

We have heard an interesting warning concerning the prospects of the AUD and CAD issued by Camilla Sutton at Scotiabank today:

"The shifting global outlook puts CAD & AUD at risk is a warning for EUR & GBP. Global data was disappointing and has renewed fears over how the recovery is unfolding.

"The combination of miserable tertiary industry index and machine orders in Japan, soft exports from China, low inflation readings in Germany, France and Spain and weak industrial and manufacturing production releases across Europe.

"This combination is likely to weigh on pro‐cyclical currencies, like CAD and AUD; and puts EUR and GBP at risk if their domestic data deteriorates further."