Pound Sterling (GBP) Exchange Rate Forecasts Today: Outlook for GBP Against the Euro, US Dollar and Australian dollar
- Written by: Gary Howes
-
Today's morning exchange rate forecast note comes as the British pound sterling comes under fresh pressure on the currency markets.
Driving the selling pressure being seen in the GBP exchange rate complex is today's below-par reading from Markit whose Services PMI came in below expectations.
The result on the GBP-USD exchange rate is emblematic of the kind of price action we have seen across the complex:
Note all quotes are reflective of the inter-bank market. Your bank or payment institution is free to levy a rate at their discretion. However, FCA-registered independent providers guarantee to undercut your bank's offer, thus delivering up to 5% more FX. Please learn more here.
The pound dollar exchange rate forecast
Analyst Sasha Nugent at Caxton FX predicts the pound dollar rate will stay under pressure:
"The pound had recovered during early trading however with UK Services data coming in below estimates there is threat of further downside. With the US employment report only a day away, solid US trade balance, unemployment claims and in particular ISM non-manufacturing PMI, could be enough to put the dollar in the perfect position ahead of the non-farm reading.
"The rate still firmly above 1.66, but the pound under pressure and there is a possibility of trading below 1.66 today. We suspect however, the market will punish the dollar for any disappointing numbers."
Pound euro exchange rate forecast
"For now sterling remains range bound but these levels may not be sustainable. Any surprise decision from the ECB will push the rate higher but we expect levels around 1.2080 today," says Nugent.
Lloyds Bank warn of pressure being exerted on the Euro by the ECB today:
"The ECB meeting is the prime focus today. Little is expected from the ECB today, however Draghi’s post-rate decision press conference will be closely watched. Recent rhetoric from ECB officials has been generally dovish, and Draghi will likely present a similarly dovish stance."
A more technical forecast on the EUR-GBP comes from Karen Jones at Commerzbank:
"EUR/GBP’s rally has terminated as expected circa .8305/15 (Elliott wave count on the 240 minute chart), this leaves the immediate downside bias intact. We should therefore see a retest of the 61.8% retracement at .8250. Below .8245/40 will target .8210 en route to major support at .8160/59.
"Current Position: Short .8279. Recommended trade: Add to shorts .8315, stops .8340."
Pound Australian dollar exchange rate forecast
Caxton's Nugent says:
"Australian retail sales data disappointed at 0.2%m/m whilst trade balance figures beat estimates at AUD1200mn which has kept the Aussie a little vulnerable. RBA Governor Stevens spoke this morning and warned that unemployment may rise a little further but the medium term problem will be a shortage of workers rather jobs.
"These comments have kept the Aussie on the back foot and with Services PMI keeping the pound supported, we may see levels of 1.8050 today."