Today's outlook for sterling, euro, dollar and Aus dollar from OCBC Bank
Emmanuel Ng at OCB Bank presents his latest exchange rate outlook note for near-term currency market action.
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Pound sterling to US dollar outlook
Apart from USD weakness, the GBP-USD was boosted by supportive data releases (retail sales) as well as somewhat hawkish comments from the BOE’s Dale (who noted that the BOE could hike in 2014) on Wednesday.
After breaching above 1.6100 on Thursday, cable may consolidate on approach of the 1.6200 ceiling. We remain neutral on the pair pending further cues.
Euro dollar exchange rate outlook
After popping above 1.3600 yesterday, the EUR-USD may attempt to base build with 1.3700 (before 1.3720) expected to be an immediate ceiling while supports are expected at 1.3646 and then 1.3620 before 1.3600.
Dollar yen exchange rate outlook
Falling UST yields crimped the USD-JPY on Thursday with the pair relapsing below its 55-day MA (98.28) once again. If the 98.00 floor is violated, the next support of consequence is expected at the 200-day MA (97.15) before 97.00. We continue to expect any potential dollar weakness to continue to manifest itself via the USD-JPY into the end of the week.
Aus dollar to US dollar exchange rate outlook
The AUD-USD may yet have some upside in the near term given the current dollar environment although we would expect some consolidation to materialise as the pair moves into the vicinity of its 200-day MA (0.9762) on a multi-session horizon.
In the near term, apart from broad dollar moves, look also to cues from the China economy as well as RBA rhetoric for further directionality.
In the interim, any retracements may meet supports at 0.9529 and then at 0.9500.