| British Pound expected to perform poorly this week |
|
| Written by Will Peters | |
| Monday, 30 November 2009 09:54 | |
|
On Monday the 30 November the British Pound is down against the Euro, but is up against the US Dollar as global markets open in positive territory. The GBPUSD is up 0.164%, 1 GBP fetches 1.6506 USD However the GBPEUR is down 0.408%, 1 GBP fetches 1.0974 EUR. The FTSE 100 opening in positive ground, as it has this morning, is a good clue as to how the British Pound will be performing against the US Dollar. The US Dollar is often lower on equity rallies as investors opt out of low yielding safe bets - something the the US Dollar has come to represent. Therefore the Pound Sterling and US Dollar rate is deriving much of its guidance from those fundamentals influencing dollar strength. Foreign currency providers TorFX predict that the British Pound may remain on the back foot this week, ahead of the Bank of England interest rate announcement on Thursday. "Investors will be looking to the UK's November manufacturing and services PMIs for direction, but the UK currency remains vulnerable to speculation surrounding additional quantitative easing and the spike in risk aversion," says Adam Solomon - analyst at foreign currency provider TorFx. There is differing opinion amongst other currency market professionals as to how the near term future will pan out for the Pound Sterling: Paul Robinson, a currency strategist at Barclays, says, "at the moment the Pound is being driven by global attitudes to risk. It's obvious that the economy has shrunk more than government forecasts suggested." Barclays remain "relatively optimistic" about the outlook for the Pound and still forecast that the UK currency will hit $1.64 against the Dollar and 1.1365 versus the Euro by March. Contrast this to the opinion of Steven Barrow, head of Group of 10 currency strategy at Standard Bank Plc who said, "sentiment toward the Pound is pretty poor and I expect it to weaken further. It looks as if we have the possibility of further quantitative easing from the Bank of England whereas all the sounds coming out of the European Central Bank are about whether they need to tighten." So it is a mixed bag ahead for the British Pound; but observing those few fundamental guides mentioned above are likely to provide a safe platform for those looking to deal in the currency this week. ____ Thanks to Adam Solomon at Corporate Foreign Currency providers TorFX for his insight into the currency markets. 
|
|
| Last Updated ( Monday, 30 November 2009 12:51 ) |