Loading...

Home pages - full list (A-Z)

Get Ready for Sterling’s “Big Finish”; Australian Dollar at 2-Week Low

Goldman Sachs is backing British MPs to soon find a way through the current political deadlock, after which a “big finish” is expected by the British pound. Meanwhile, pessimism surrounds the Australian and New Zealand dollars, both of which have fallen to multi-week lows.

Currency-News AUD GBP NZD USD
Email share     Facebook     LinkedIn    Twitter
  GBP British pound sterling currency news and forecasts Brexit

“Sterling is maybe the biggest opportunity among developed market exchange rates today,” Goldman Sachs’ head of FX strategy, Zach Pandl, has told Bloomberg.

The pound has weakened to $1.303 since Monday night’s second round of indicative votes, in which all four of the soft-Brexit options put to the UK parliament were again rejected by MPs. The pound had been worth $1.311 prior to the results being announced.

Unlike some others in the market, Goldman’s Pandl doesn’t see the failure to secure a majority on one or more indicative options as a negative; instead, it draws us closer to the end of the current Brexit impasse, after which sterling will rally quickly, he believes.

“We do think we’re making progress despite these failed votes. We’re coming to a big finish here [for GBP].”

Goldman Sachs is the second major US bank in recent days to publicly back the pound.

GBP to USD - 1 Week chart to 02 Apr
GBP/USD - 1 Week chart to 02 Apr

Britain’s currency is “attractive” at current levels, Morgan Stanley wrote last week, because a soft Brexit (one that ensures a close economic relationship between the UK and EU) is most likely and because, in Morgan’s view, “the risks of a hawkish Bank of England remain underpriced.”

Though the pound is also trading lower against the euro, Canadian dollar, Swiss franc and Japanese yen, it has gained value against the under-pressure Australian and New Zealand dollar currencies, both of which continue to weaken amid a significant repricing of interest rate expectations.

On Tuesday afternoon, the Reserve Bank of Australia appeared to hint at a possible shift to a rate-cutting bias at its next meeting when it appended to the bottom of its statement an unfamiliar sentence: “The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.”

Following the RBA’s announcement, the Australian dollar fell to its lowest level in 2 1/2 weeks, at $0.705. The highly-correlated New Zealand dollar slipped to its weakest level since mid-February, at $0.674.

Many of the big currency forecasters are giving a thumbs down to both the kiwi and Aussie for the near and medium term.

 

Further Reading

 

Swiss Franc Slumps to 6-Month Low Versus Euro

The Swiss franc continued its shocking run of form on Tuesday, slipping against the euro to its weakest level in 6 months.

Updated: 23 Apr, 2019

8 Percent Drop Coming Soon for Australian Dollar; RBA “Wants a Weaker Currency”

HSBC has reaffirmed its US66¢ year-end forecast for the Australian dollar, thereby signalling an upcoming 8 percent slide in the world’s fifth most traded currency.

Updated: 22 Apr, 2019

WorldFirst World Account – BER Review

WorldFirst World Account – Independent BER Review World Account: A Summary WorldFirst, a market leader in the international payments space, offers a multi-currency “World Account” that allows businesses to hold, send and receive funds in 8 major currencies (GBP, EUR, USD, AUD, CAD, JPY, SGD and NZD). With a World Account, businesses can invoice customers […]

Updated: 23 Apr, 2019

SGD/MYR at 17-Month High; Ringgit Slumps on FTSE Index Deselection

What is arguably Southeast Asia’s most important exchange rate, Singapore dollar-Malaysian ringgit, leapt on Thursday to its highest level since November 2017, driven by FTSE Russell’s decision to reconsider Malaysia’s inclusion in an important bond index.

Updated: 18 Apr, 2019

Commodities Boom Will Take Australian Dollar to US$0.74

The Australian dollar is forecast to climb to US$0.74 in the coming months, supported by a commodities boom that has seen the price of Australia’s largest export, iron ore, climb to a 5-year high.

Updated: 15 Apr, 2019

  

Tags: Currency-News , , , ,

 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
   

Get a Better FX Deal when you Send and Spend Abroad.

 

Do NOT follow this link or you will be banned from the site!