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Foreign Exchange Outlook for the Euro, Dollar, Pound Sterling, Australian Dollar and Japanese Yen

A look at the latest spot market exchange rates shows the US Dollar is on the backfoot while the Australian dollar has surged higher:

  • The Euro Dollar exchange rate is 0.43 pct higher than seen at last night's closing rate at 1.3351.
  • The Pound Dollar exchange rate is 0.33 pct higher at 1.5930.
  • The Australian Dollar to US Dollar exchange rate is 1.45 pct higher at 0.9381.
  • The US Dollar to Japanese Yen rate is 0.47 pct lower at 0.9891.

Please be aware that the above quotes are wholesale; your bank will charge a discretionary spread when passing on their retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.

The below currency outlook note comes courtesy of Emmanuel Ng at OCBC Bank:

Outlook for the Euro Dollar exchange rate

Apart from the dollar story, German Parliamentary elections this weekend may also provide some distraction for the EUR, while the troika is also expected to begin its review win Portugal, Spain, and Cyprus.

In the interim, expect the EUR-USD to remain on a neutral to supported footing with net CFTC speculative EUR shorts being pared in the latest week. Immediate resistance is expected towards 1.3400 before 1.3450 while key support multi-session is expected at around the 55-day MA (1.3214).best exchange rates

Outlook for US Dollar to Japanese Yen exchange rate

Japan is away for a long weekend today and the USD-JPY may trade heavy in the wake of the Summers-related news flow and market wariness towards the dollar in pre-FOMC trade.

On the CFTC front, net speculative JPY shorts were pared in the latest week, and we continue to think that the USD-JPY remains a cleaner representation of dollar sentiment ahead of and post FOMC. Immediate support is expected at the 55-day MA (98.89) before the 98.30 area while 100.00 on the upside remains a heard habit to break for now.

Australian Dollar to US Dollar exchange rate outlook

We remain tactically positive on the AUD-USD in the near term amid largely dollar unfriendly news flow  dominating the headlines. On the CFTC front, net speculative AUD shorts were pared in the latest week but the pair would have to overcome the 0.9375/00 area if it is to establish another leg higher multi-session.

On the downside, support for the pair is expected towards 0.9200/30.

Pound Dollar exchange rate forecast

Construction numbers also lent a hand to the GBP on Friday with the GBP-USD managing to lift above 1.5800  convincingly while the EUR-GBP finally sank below 0.8400. Going ahead, note that GBP-USD has broken above its recent monthly range on the back of supportive UK economic news flow with the next expected waypoint expected only at 1.6000 while some consolidation can be expected around the 1.5885 region.

On the CFTC front, note that net speculative GBP shorts were also pared in the latest week.

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