Today's exchange rate forecasts: EUR top-heavy, GBP contained and AUD under pressure in current pro-USD environment

Latest exchange rates

The GBP to USD is at 16090.
The EUR to USD is at 1.3434.
The USD to JPY is at 10085.
The AUD to USD is at 0.9272.

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Exchange rate forecasts for today

The big theme in global FX at present is that concerning the euro; EURUSD took a dive yesterday on rumors (by two people who declined to be identified) stating that ECB may consider a smaller-than-usual cut (minus 0.1%) to deposit facility rate if it decides to move it below zero.

EURUSD extended losses to 1.3414 post-Fed minutes.

We consider the latest forecasts following this event, and the release of the Fed minutes. The below come courtesy of analyst Emmanuel Ng at OCBC Bank:

EUR to USD exchange rate forecast

EZ November PMIs are due to be released today but after having failed to over come the 55-day MA (1.3519), the EUR-USD may instead test towards 1.3400 before 1.3385.

Structurally, the FOMC minutes overnight again brings into focus the perceived divergence between the Fed and the ECB and this should keep the pair top heavy.

USD JPY exchange rate forecast

USD-JPY failed to capitalise on the slightly firmer US Treasury yields but the potential updraft from the FOMC minutes may see a test above the 100.60 resistance. A sufficiently dovish BOJ today may also give the pair additional lift. With initial support seen at 100.00 in the near term.

AUD to USD forecast

The AUD-USD is expected to remain heavy in the current dollar environment although the flash PMI for China may provide room for some distraction. Note also that the RBA’s Steven’s is due to make an appearance at 0905 GMT and any further jawboning on the AUD would also work to cap the pair. Resistance is expected at 0.9400 and then at the 55-day MA (0.9430) although the current risk-reward profile may favour a further dip towards 0.9300 and then 0.9245.

GBP to USD exchange rate forecast

The BOE MPC minutes released on Wednesday demonstrated no new impetus to tighten monetary policy, noting that interest rates may not be raised immediately even if the 7% unemployment threshold is reached. Coupled with a firmer dollar, the GBP-USD may attempt to stay submerged below 1.6100 and seek out the 55-day MA (1.6033) once again.