Exchange Rate Forecasts

The Pound-to-Australian Dollar exchange rate entered the mid-week session close to what may be an important level of support but could return toward recent highs around 1.84 over the coming days owing to uncertainties in and around the Aussie Dollar.

The New Zealand Dollar can continue to rise owing to May's surprising shift in stance at the Reserve Bank of New Zealand according to Wall Street investment bank JP Morgan, but the FX research team at Barclays tell their clients they are expecting weakness in the currency over coming days.

The Euro-to-Dollar exchange rate was levitating near three month highs to open a holiday-shortened week on Tuesday but could derive further upside over the coming days if Chinese commercial banks go topping up on foreign currencies as they appeared to on Monday.

The Pound-to-Dollar exchange rate enters a holiday shortened week near the top of a tight range that has gripped it through much of May, the upper and lower bounds of which could be tested if-not overcome by Federal Reserve (Fed) policy talk or developments in Renminbi exchange rates.

The Pound-to-Euro exchange rate could be volatile with an upside bias this week if a recent across-the-board uplift in Renminbi exchange rates leads the Peoples’ Bank of China (PBoC) to buy non-Dollar currencies in a bid to fend off appreciation pressures coming from the Dollar.

While the Australian Dollar might have been left behind by booming commodity prices, it is unlikely to suffer any major decline, particularly if the country's latest trade data is anything to go by.

The Euro is unlikely to make a concerted break above current levels against the Dollar say strategists at TD Securities.

A struggling Dollar has opened the door to further gains by the Pound and Euro, with a good portion of recent losses coming on the back of fresh commentary out of the U.S. Federal Reserve.

The Euro-to-Dollar exchange rate entered the new week with a rally that could quickly see 2021 highs come into contention if the single currency succeeds in getting past the nearby 1.2240 level over the coming days, with upside risks if any commodity-inspired appreciation of the Renminbi materialises.

The Pound is likely to struggle against the New Zealand Dollar over the short-term given the significant technical resistance in the market around current levels, however the mid-week Reserve Bank of New Zealand meeting is tipped by some market professionals to offer excitement.

The Australian Dollar could be stronger if it were not for the country's slow vaccination rollout say foreign exchange strategists at a leading Australian lender.

The Pound-to-Dollar exchange rate enters the new week underpinned by nearby support levels and within arm’s reach of 2018 highs, although much about price action over the coming days depends on international factors like investor appetite for the greenback and developments in Renminbi exchange rates.

The Pound-to-Euro exchange rate remains underpinned by an economy that is tentatively delivering on bullish market expectations but could receive a further boost in the coming days and weeks if Chinese policymakers go ahead with a possible decision to allow the Renminbi to appreciate against the Dollar.

"Having been vocal GBP bulls at the start of the year we are now turning bearish," say foreign exchange analysts at Deutsche Bank.

Foreign exchange analysts at a leading Scandinavian lender and financial services provider tell clients they are "still bullish on GBP" and expect a steady appreciation against the Euro over the coming 12 months.

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.