Exchange Rate Forecasts

EUR/USD could see choppier trade this week as range-bound consolidation could be resolved by central bank policy decisions.

GBP/USD facing trifecta of downside risks that could stymie recovery & open up new lows.

The Pound to Euro rebound risks being undermined by new Covid restrictions, the weight of which could potentially act to pull Sterling back near to 1.1550 this week or thereafter.

The Pound to Euro exchange rate is expected to appreciate in coming months according to foreign exchange analysts at Commerzbank, the Frankfurt based lender and global financial services provider.

The Dollar's run of strength that saw it dominate global FX markets in 2021 is not set to end soon, according to one of the largest lenders in the United States.

National Bank of Canada says the recent decline in the value of the Canadian Dollar merely makes it even more undervalued relative to fundamentals, as they forecast gains in 2022.

The Pound to Dollar exchange rate is on course for sub-1.30 readings according to new analysis, although another analyst at a major investment bank says any such move would prove fleeting.

"Peak EUR" has passed and further losses are likely in 2022 say foreign exchange strategists at Danske Bank, who have released their top trades for 2022.

GBP/NZD starts the new week with another gain and has gone to its highest level since October 13 at 1.9654, further gains are likely as global investor sentiment is set to remain shaky.

GBP/CAD struggling against resistance at 1.7064 and faces further impediment to recovery at 1.7166.

EUR/USD attempting to stabilise above 1.1290, aided by global market weakness and risk aversion.

GBP/USD closes in on major supports at 1.3171 & 1.3153 on Fed pivot toward faster taper, possible earlier rate rises.

The Pound to Euro exchange rate has unwound much of its Q4 rally and risks slipping back toward early November’s lows in the 1.1630 area if the market continues to eschew risk currencies in favour of safe-havens over coming days.

"We suspect that barring a clear scientific consensus pointing to a limited impact from the Omicron variant, this uncertainty will likely curtail investor willingness to “buy the dip” in CAD." - Credit Suisse.

Foreign exchange strategists at Credit Suisse are holding onto their view that the Euro will head lower against the Dollar, saying the Federal Reserve won't "bail out investor sentiment".

Federal Reserve Chair Jerome Powell sent a lighting rod through financial markets on the final day of November when he said he no longer expects inflation to be temporary.

The Australian Dollar is forecast to rise in 2022 by analysts at global lender and investment bank ING, but it also faces the greatest downside risks of its G10 peers.

The Australian Dollar is the most oversold it has been since the August 2021 - Westpac.

The Euro-Dollar exchange rate ended last week with a steamrolling rally alongside the safe-haven Swiss Franc and Japanese Yen but could struggle for further traction over the coming days if global markets stabilise and as coronavirus related risks mount on the European continent.

GBP/USD may rebound if global markets recover but lingering Fed policy risks likely to limit upside.