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Weekly Currency Market Forecast: AUD, GBP, USD, EUR Exchange Rates

27 February 2017 by News Desk

The week ahead will be a busy one for markets with a host of political announcements due to make their way onto the scene – whether that be Brexit related, French election news, or immigration announcements from the US, say currency market specialists FC Exchange.

Australian Dollar (AUD) Exchange Rate Forecast for Movement on GDP and Trade Surplus

The Aussie dollar could experience some significant movement in the week ahead with the release of some highly influential ecostats. Wednesday’s Pacific trading will see Australian gross domestic product (GDP) numbers published. In the third quarter of 2016 the annual figure came in at 1.8% and economists have suggested this could remain the same. However, in quarterly numbers, Q3 2016 registered a contraction of -0.5%, whereas predictions for the final quarter of the year reside at +0.6%. If GDP figures print positively the Australian Dollar (AUD) exchange rate could be in for a rise.

Thursday’s likely to be another important day for AUD movement with the release of the Australian Balance of Trade number. It’s expected that the Australian trade surplus could increase again in the January reading. The December figure came in at A$3.5B and economists are suggesting that it could rise to breach the A$3.6 level.

Pound Predicted to Fluctuate on Article 50 Brexit Developments

There’s a few data releases scheduled for this week that could impact sterling’s strength, starting with the Gfk consumer confidence. Sentiment in the UK resided at -5 in January and it’s expected that February will worsen to -7. If the ecostat prints negatively it’s likely the pound will soften against other currency majors.

Thursday will see the publication of Markit’s UK construction purchasing managers’ index (PMI) and Friday will close up the week for UK data with the Markit services PMI. It’s expected that a large portion of the pound’s market movement will be catalysed by Brexit developments and so any progress in the ability to trigger Article 50 will likely instigate GBP exchange rate fluctuations.

US Dollar Exchange Rate Awaiting Durable Goods, GDP and Tax Statements

The US dollar exchange rate is forecast for a rollercoaster week with the release of several pieces of high-tier data amid political announcements on tax and immigration. Monday will kick-start the week with durable goods orders figures – it’s expected January’s recording will recover by 1.8%, following December’s -0.4% contraction. Also out on Monday of high influence is US pending home sales data which could influence the greenback’s movement.

Tuesday will bring with it the highly anticipated US Q4 estimated GDP figures. The previous reading had registered a healthy 3.5% growth quarter-on-quarter, and economists are predicting a slowdown to 2.1% in Tuesday’s publication.

Wednesday’s ISM manufacturing PMI and Friday’s ISM non-manufacturing numbers are also of high importance but economists have predicted only slight changes in these figures on the month. Another area that will be an important factor in USD exchange rate movement will be President Trump’s comments this week about tax and immigration.

Euro a Wildcard in the Market as French Politics Take Over

The euro has had a difficult time of late as far right wing political party leader Marine Le Pen closes the gap between herself and opposition. Le Pen is remaining resilient in the lead-up to the elections which have been flecked with police investigations.

It was thought Francois Fillon who had campaigned as a squeaky clean choice for voters was alleged to have paid his wife for a fake job earning her a total of €680,000 of taxpayers’ money. Now Le Pen has been hit with a French investigation that suggests the party may have misused in excess of €300,000 in order to pay French party employees, illegally.

Le Pen has point-blank refused to be questioned by police, despite the summons, until the presidential and parliamentary elections are completed in June. The party’s headquarters have been raided by police. As developments in the political front take place, the euro exchange rate is likely to be volatile and perhaps a wildcard in the market.

In terms of economic data, Monday will see the release of Eurozone business confidence, followed by the highly influential German unemployment rate and inflation rate numbers on Wednesday. Thursday will reveal the overall Eurozone unemployment number – economists have suggested it will remain stable at 9.6%. There’s a host of middle-tier data scattered across the week to be published which may also impact the euro to Australian dollar (EUR/AUD) exchange rate.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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