G3 Exchange Rate Forecasts: Pound Dollar Rate, Euro Dollar Rate and Euro Pound Predictions for the Mid-Term

Looking at the forecasts, the broader picture remains positive for the British pound (GBP). For reference the following mid-market levels are available:

• The pound to euro exchange rate (GBP/EUR): 1.2024
• The pound sterling to dollar (GBP/USD) exchange rate: 1.2532

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Pound dollar exchange rate forecast: OCBC Bank initiates bullish view

The outlook for GBP/USD remains positive, with the pound dollar rate sitting near the 2014 highs.

OCBC Bank analyst Emmanuel Ng tells us he is looking to initiate long positions on the currency pair:

"In the wake of Carney’s comments last week, UK data points may garner increased scrutiny going ahead, with the slew of May price numbers due for release later today.

"After a brief test above 1.7000, the GBP-USD remained aloft above 1.6950 into end-NY and may remain somewhat supported into the BOE MPC minutes due on Wednesday.

"Notably, the BOE’s Miles (noted dove) was quoted in the Times as saying that he would expect to vote for a hike by May, adding that “growth has come in stronger than expected”.

"Given the BOE’s current demeanour, we look for opportunities to initiate a bullish GBP-USD view going ahead. Expect support to materialise around 1.6930 while a breach of 1.7000 once again may see a test towards 1.7040/45."

Euro dollar exchange rate forecast: "Shockingly positive" economic data release needed

The euro dollar rate today finds support as buyers step into the markets and pick up a discounted euro. But, is this enough to end the recent downtrend?

Alex Gurr, Currency Analyst with Blackwell Global tells us he is not positive regarding the euro's forecast:

The daily chart (see chart above) shows the bears at work though, and it's looking very strong - especially after today’s touch and pull back. For the bears to be defeated and the bulls to take charge I would have to see a breakthrough on the current trend line and a push up to at least 1.3601. However, in the short term I am very much bearish on the EURUSD cross.

It’s easy to see why, we have had a brief double bottom and now the market is starting to turn on the daily after a trend line touch, I expect to see further lows as the trend line looks to hold. Only a shockingly positive economic sentiment survey could sway the market, and the Germans are certainly not optimists.

Euro to pound exchange rate: EUR/GBP to see consolidation kick-in

Sterling has enjoyed a very strong run of late and at some point consolidation will kick in. Even so, we don’t row against the tide.

Analyst Piet Lammens at KBC Markets says:

"We have a long-standing EUR/GBP negative bias and keep this in place. The 0.7755 2012 low is the next high profile target on the cards.

"With a little help from euro weakness, this target might come within reach sooner than expected until now. Cable is testing the 1.70 level. The picture in this cross rate has improved, too and a sustained break is well possible especially as the dollar isn’t really in good shape. In a longer term perspective, we are more neutral on the upside potential for cable."