The world of foreign exchange (forex) trading is arguably one of the most complex and nuanced financial marketplaces on the planet. Featuring an array of finely tuned pricing mechanisms and intricate arrangements, the process by which currencies lose or gain value relative to one another has become a trillion dollar industry.
Market analysts have released their exchange rate predictions for the month of June, and their assertions seem to coincide directly with recent announcements in key nations around the world.
The British Pound Sterling has made further gains, expanding its competitive edge on international currencies due in large part to recent announcements that manufacturing data has demonstrated healthy growth. Although the Bank of England's recent statements on monetary policy are causing some to worry that the price rally being experienced by the Pound Sterling is only temporary, analysts are recommended a neutral to positive outlook on this particular currency.
Similar successes cannot be claimed by the Euro Dollar, which has suffered slightly due to recent revelations that the ECB might continue to reduce interest rates, further driving down the value of this already beleaguered currency. Combined with disappointing manufacturing news, the Euro is believed to currently be in a period of decline. Analysts have adopted a negative outlook on this particular currency.
The US Dollar's positive manufacturing reports will most likely keep this currency within previously established ranges compared to the Pound Sterling. That being said, the recent Michigan sentiment index is largely negative, potentially undercutting any positive outlook nurtured by the overall manufacturing report. Analysts currently believe that the US Dollar sits at a neutral to positive outlook.
The Australian Dollar has been impaired slightly by recent reports illustrating weak domestic building numbers. Because of this, it is unlikely that the Reserve Bank of Australia will move to strengthen the national currency using an interest rate hike. According to analysts, the Australian dollar currently sits at a neutral to negative outlook.
Overall, the assertion could be made that the “threat” of volatility in the forex marketplace will be greatly enhanced or reduced by policies currently being decided upon in Europe and Australia. That being said, many of the world's major currencies stand to benefit from any sign of weakness in these aforementioned economies.