Today's exchange rate forecasts (Wed 23/10): Outlook for the pound, US dollar, Euro and Aus dollar

Market summary

Currency markets were rattled by a newswire report that Chinese banks have had to triple the bad debt write offs preparing for a fresh wave of defaults in the world's second largest economy.

"The news which swept through the market in midday Asia trade kept pressure on all the high beta currencies and triggered a wave of selling in AUD/USD and GBP/USD in particular," notes Boris Schlossberg at BK Asset Management.

Current exchange rates for reference

The pound dollar exchange rate is 0.4 pct lower at 1.6170.
The euro dollar exchange rate is 0.02 pct higher at 1.3784.
The Australian dollar to US dollar exchange rate is 0.9 pct lower at 0.9619.

Note: The above are spot market inter-bank quotes; your bank will add a spread to the figures at their own discretion. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more.

Today's short-term exchange rate forecasts

Ipek Ozkardeskaya at Swissquote Bank on the pound dollar exchange rate's forecast:

"GBPUSD has sold-off in the Asian session giving back all of yesterday’s gains. While the pair is contained between 1.6130 to 1.6260, indicators are marginally bullish. With MACD steady above the zeroline we anticipate fresh demand to challenge 1.6260 resistance.

"Watch for next resistance to come into play at 1.6260 (1st Oct high) then 1.6343 (2013 high). The support levels from here are 1.6130 (9th Oct high), 1.6063 (16th oct pivot high), 1.5884 (13th Sept high), 1.5759 (17th June high), 1.5726 (65 dma), 1.5600 (resistance turned support) then 1.5471 (200 dam)."

Euro dollar exchange rate forecast

Leander Dreyer at Jyske Bank says:

"As the probability that the Fed will postpone its scaling down of QE increases, we will also postpone our expectations of the coming USD strengthening. After yesterday's weak report, there is a high probability that EURUSD will continue up towards 139-140 over the period until the end of the year."

Luc Luyet at MIG Bank says:

"The medium-term bullish momentum remains strong as can be seen by the fresh multi-month highs. However, the increasing overbought conditions and the key resistance area given by the long-term declining trendline (around 1.3970) and the psychological threshold at 1.4000 should put a cap to the medium-term upside potential."

Australian dollar outlook

Citibank FX give us their forecast for the Australian to US dollar rate:

"The Aussie rose strongly to 0.9731 yesterday on dollar’s broad-based weakness together with the strong economic recovery in China.

"AUD Outlook: The expectation of the end of the rate-cut cycle may support the pair in medium term.

"Technically, AUD/USD will likely rise further to around 0.9900, with short-term support at 0.9645