Tag: United Kingdom

  • Foreign Exchange Rate Economic Indicators for GBP, USD, EUR, AUD, & CAD

    Foreign Exchange Rates for the Pound Sterling, US Dollar, Euro, Australian Dollar, and the Canadian Dollar can all be partially predicted if you know what to look for. Want more exchange rate forecasts?

    Pound Sterling

    Be on the lookout for the the latest edition of the Rightmove house price index, which can give indications for whether or not the Sterling is going to be moving positive or negative in the future. FXwords has a complete list of UK economic indicators.

    US Dollar

    Michigan Confidence survey seeks to understand US consumer attitudes and expectations about the US economy by gauging how consumers feel the economic environment will change. The survey’s Index of Consumer Expectations is an official component of the US Index of Leading Economic Indicators.

    Euro

    The OECD Leading Indicator measures the economic outlook for the Euro-zone as a whole. According to FXwords, it is “one of the most respected international economic research institutions, the Organization for Economic Co-operation and Development (OECD) releases the Leading Indicator for early signals of economic expansion or slowdown. It takes a number of indicators known to precede changes in growth to serve as a short term forecast of Euro-zone developments. The OECD Leading Economic Index focuses less on how much economies change, but rather on the direction they are moving.”

    The Pound Australian Dollar

    Australia’s Westpac Consumer Confidence index, officially called the Consumer Sentiment Index, measures the level of consumer confidence and is an average of five indexes measuring different aspects of consumer fiscal health. According to FXwords, “This is one of the few indicators that are entirely expectation based. Households report their views on current buying conditions for household items and where they feel are the “wisest” places to invest savings. Views on future political policy (taxes, politicians, government) and economic conditions (wages, inflation, unemployment) are also surveyed.”

    The Pound Canadian Dollar

    Canada’s Ivey Purchasing Managers Index (PMI) is a monthly measure of the change in purchases by corporate executives. A headline value above 50 indicates an increase in purchases from the previous month and a value below 50 indicates a decrease, which can be a good economic indicator. FXwords has a complete list of Canadian economic indicators.

    Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

  • June 2011 Interest and Exchange Rate Forecast

    The June 2011 RBS Interest & Exchange Rate Forecast (PDF) is out.

    Interest Rates

    The Bank of England did not raise rates in June, despite higher inflation due mostly to commodity prices. In order to curb inflation, their Monetary Policy Committee (MPC) may raise interest rates, but it depends on the strength of demand in the United Kingdom.

    In the US, as quantitative easing (QE2) draws to an end, the Federal Reserve is turning to how and when it starts to tighten policy. The April minutes of the Federal Open Market Committee meeting indicate that it has a preference to lead with interest rate hikes, which would curb inflation, rather than begin unwinding its quantitative easing program (though options for this were discussed). RBS expects the Fed to wait until the first half of 2012 before raising interest rates.

    The European Central Bank (ECB) left rates on hold at 1.25% in June, but by using the code word “strong vigilance” President Trichet signalled a second hike for the year at the next ECB meeting in July. With inflation at 2.7% in May and above the 2% ECB target for six consecutive months, the ECB Governing Council will justify an increase in interest rates despite signs of a slowdown in the euro area. ECB President Trichet suggested the establishment of an EU Ministry of Finance with veto rights over member states’ specific spending decisions as a first step towards closer fiscal union. While this will be of little help in the fight against the current sovereign debt crisis, it may be an issue to be tackled by Mario Draghi (Italy) in October, who has received the support of France, Germany and the ECB to succeed Trichet as President.

    Exchange Rates

    The euro plummeted from 1.49 against the USD to 1.40 in mid-May – a two month low, while GBP/EUR jumped to 1.15. But much of the lost ground was regained with an outline agreement for further financial aid to Greece (though the outline fails to address the long term issue regarding the sheer scale of Greece’s debt burden). Moreover, the hawkish ECB continues to provide support from a yield perspective, signalling a second rate hike in July, while all other central banks sit firmly on their hands. The long term impact of rising interest rates could prove euro negative if it disrupts the recovery in the periphery economies, but this factor has certainly been supportive in the short term. The relative attractiveness of sterling and the dollar has been hit by softening growth/interest rate expectations and jitters over the size of the debt overhang facing these regions. With macro data pointing towards a further slowdown in UK and US economic activity, growth expectations have also been scaled back. Moody’s warned the UK that 16 banks could face a downgrade to its credit rating if a further slowdown in growth put the government’s fiscal austerity plans in jeopardy. Meanwhile, US policymakers continue to bicker over an extension to the Federal debt ceiling and a long term deficit adjustment plan. GBP/USD has been range bound between 1.60-1.65 for the past month and we continue to expect it to remain at these levels which also look to be close to fair value. JPY has appreciated against the USD and is approaching levels south of the 80 mark which triggered multilateral currency intervention in March.

  • Exchange Rate Forecast

    Exchange Rate Forecast covers European currencies like the Euro, currency converter forecasts, currency charts, American currency, African currencies, US dollar exchange rate history, long term currency exchange rate forecasts, cross-currency swaps, and balance of payment (BOP) exchange rates. If you’re not sure what any of this means, don’t worry, I’ll cover those things here on Ex-Forex. Exchange Rate Forecast was originally ran and created by the author of Economy Watch, which covers the world economy, investment, banking, and credit cards for Australia, Canada, India, Ireland, Malaysia, Pakistan, Singapore, South Africa, the United Kingdom (UK), and the United States (US).

    Many people search for exchange rate forecasts during the week to guide them on Forex, which is a decentralized over-the-counter financial market for trading currencies. This currency exchange marketplace assists international trade and investment, by allowing businesses to convert one currency to another currency, such as US dollars to British Pound Sterling. It also supports direct speculation in the value of currencies, and the carry trade (investors borrowing low-yielding currencies and lending or investing in high-yielding currencies), which is a form of speculation on the change in interest rates in two currencies.