Exchange Rate Forecasts

The New Zealand Dollar is on a "highway to strength", say analysts at HSBC, the global investment bank and lender.

The Euro-to-Dollar exchange rate retains a pathway back toward 2021 highs at the opening of the new week after recovering vigorously from a swift and seemingly decisive setback dealt to it by the U.S. Dollar and bond market in recent days, although getting back to those levels may be a slow burning affair.

Pound Sterling starts the new week higher against most major currencies having convincingly overcome 1.40 against the Dollar in the previous week, where the U.S. currency was itself lifted almost across the board in often-volatile trading.

The Pound-to-Euro exchange rate opens the new week above 1.16 following its best week since February, but would need a series of favourable outcomes from looming economic data releases over the coming days to sustain its current buoyant level now the economy is back in Sterling's driving seat.

The British Pound is likely to remain supported against the Euro and Dollar over coming weeks but as we move into the back-end of 2021 that support is likely to fade, leaving a high-water mark for Sterling sellers potentially around the third quarter.

"Upside risks building" reads the headline to the latest global overview of the New Zealand economy and its components, including the New Zealand Dollar, by Auckland Savings Bank.

With political considerations now largely out of the way, investors have been able to focus fully on the Bank of England's seemingly bullish outlook for the UK economy and have purchased the British Pound.

The Pound-to-Canadian Dollar rate entered the new week on its front foot but is now trading under the auspices of a new and lower range that could ultimately see Sterling capped by the 1.72 level in the absence of a setback for Canada’s Loonie.

The Euro-to-Dollar exchange rate entered the new week near its late February highs but could reclaim further lost ground over the coming days now that the global economy is showing signs of shifting into a higher gear and the market has blinked in an attempted stare down of the Federal Reserve.

The Pound-to-Dollar exchange rate starts the new the week above 1.40 amidst a broadbased buying of the Pound.

The Pound-to-Euro exchange rate could be lifted by a dissipation of domestic political risks this week but gains may be slower to materialise than in the past, leading GBP/USD to outperform GBP/EUR during the weeks ahead in the absence of any upside surprises to new forecasts from the Bank of England.

The Pound-to-New Zealand Dollar rate could test the upper bound of a likely short-term trading range ahead of the weekend if a pending policy decision from the Bank of England (BoE) casts the market as too pessimistic on UK interest rate prospects this Thursday.

There is a chance the Bank of England will announce a boost to its quantitative easing programme at its Thursday 06 policy event, according to economists at TD Securities.

The Pound-to-Canadian Dollar rate entered the new week near 2021 lows and facing an uphill struggle to recover in the absence of a let up from a rampantly strong Canadian Dollar or boost from the Bank of England this Thursday.

The Euro-to-Dollar exchange rate entered the new week appealing for dip buyers to salvage its earlier recovery after a U.S. Dollar power surge asked fresh questions of the short-term outlook for the single currency.

The Pound-to-Dollar exchange rate entered the new week down sharply from April highs after being turned over by bad global market weather on Friday, but would be likely to sustain a recovery if given the all clear by the Bank of England on Thursday.

The Pound-to-Euro exchange rate has been an almost tranquil harbour of stability through recent market turbulence but may find any upward endeavours frustrated this week and itself frozen in the headlights of an oncoming Bank of England decision that will capture the market’s attention on Thursday.

The British Pound and Euro have succumbed to a grinding war of attrition around the 1.15 area in the Pound-to-Euro exchange rate, leaving those with FX transaction requirements wondering just how this market will resolve itself.

The Euro has advanced against a broadly weaker U.S Dollar over the course of the past 24 hours, with analysts saying the door is ajar to a fresh test of the 2021 high.

Foreign exchange strategists at investment bank Nomura are forecasting a rally higher in the Euro against the Dollar driven by positive portfolio flows over coming weeks and months.