Exchange Rate Forecasts

The Pound-to-Dollar exchange rate enters the new week licking wounds near to early May lows around which it could stabilise ahead of an important address from Federal Reserve (Fed) Chairman Jerome Powell on Tuesday, and June’s monetary policy decision from the Bank of England (BoE) on Thursday.

The Pound-to-Euro exchange rate enters a pivotal week having held comfortably above 1.16 even after a heavy fall on Friday, and could have scope to retest its 2021 highs around 1.18 over the coming days if there's any 'hawkish' tinge to the latest Bank of England (BoE) policy update on Thursday.

The Australian Dollar hit its lowest level for 2021 ahead of the weekend, supporting GBP/AUD near year-to-date highs in the process, although St George Bank has warned that an ongoing bounce in the U.S. Dollar could lead AUD/USD to fall as low as November 2020 levels.

Foreign exchange strategists at investment bank Nomura are looking to sell the Euro and buy Pound Sterling in anticipation of outperformance by the UK currency.

Foreign exchange analysts at Wall Street banking giant Morgan Stanley aren't convinced the Reserve Bank of Australia is going to become a source of significant source of upside impetus.

The British Pound's strength thus far in 2021 has caught the FX analysis team at HSBC by surprise, but they are unsure the good times will last for the currency.

The Pound-to-Australian Dollar exchange rate could potentially sustain a move above 1.84 during the weeks and months ahead if Australia’s ongoing battle to revive a long-inadequate inflation pulse continues to render the antipodean unit a laggard among major currencies.

The Pound-to-New Zealand Dollar exchange rate has thus far spent the fledgling week attempting to overcome the nearby 1.98 handle, a level above which its oxygen would begin to thin heading into a litany of key risk events for the Kiwi and Sterling.

The Pound-to-Canadian Dollar exchange rate may be susceptible to slippage as far as 1.7050 on Tuesday if the latest decision from Downing Street has any impact on Sterling, although an action-packed UK economic calendar could also see GBP/CAD testing 1.7150 again.

The Pound-to-Dollar exchange rate stabilised above 1.41 on Monday but could see both the upper and lower boundaries of its recent trading range tested over the coming days in what promises to be a noisy week for the UK and U.S. currencies.

The Pound-to-Euro exchange rate entered the new week above 1.16, a level upon which its grip could solidify over the coming days if an action-packed UK economic calendar can be navigated without upset, although international factors will pose up and downside risks.

The Canadian Dollar is tipped to trade consistently below a key level against the U.S. Dollar in the second half of 2021 as the Bank of Canada continues to offer a supportive impulse.

National Bank of Canada says further Canadian Dollar strength lies ahead and the currency is likely to take value off the Dollar, Euro and Pound over coming weeks as a result.

The Dollar will depreciate further say strategists with Goldman Sachs who have this week confirmed they maintain bets against the currency.

"EUR-USD is still trading below 1.22, indicating that investors remain prudent about riding a more sustained appreciation of the common currency or a decline of the greenback, and that they are probably waiting for the upcoming ECB meeting on Thursday," says Roberto Mialich, FX Strategist at UniCredit Bank in Milan.

The British Pound continues to knock its head against a significant resistance level against the Dollar, a break of which is required to reignite the buying interest required to propel GBP/USD to new multi-year highs.

The Euro is struggling to find any notable strength ahead of this week's key meeting of the European Central Bank (ECB) which leaves investors cautious as they await the central bank's update on the outlook for monetary policy in the bloc, due on Thursday.

The Canadian Dollar remains 2021's best G10 performer, however analysts at Canadian lender CIBC say the top might just be in.

"We upgrade our forecast for the New Zealand dollar," says Georgette Boele, Senior Currency Strategist with ABN AMRO, the Dutch headquartered international investment bank and financial services provider.

Foreign exchange strategists at Credit Suisse say the Euro is unlikely to travel beyond 1.23 over coming weeks as the European Central Bank's June meeting will likely disappoint buyers.