The current pound to euro exchange rate is at 1.1328 while the current pound to US dollar exchange rate is at 1.6324. The latest pound exchange rate forecasts see the British Pound sterling under-performing in the near term. In a note to corporate clients released today, currency analysts at RBS say: "UK Q2 GDP stayed unrevised, posting a meagre 0.2% qoq growth, confirming that the UK economy is being pushed towards its stall speed. The new found support that GBP was enjoying as a safe haven currency appears to have run its course. "RBS FX Strategy team in their recent note argues that in the near- term a lack of real rate support for GBP will see it underperform. However, their long-term fair value model, also outlined in the report, suggests the long-term fair value for EUR/GBP and GBP/USD sit around 0.82 and 1.60 respectively, a view reflected in the team’s GBP forecasts." Meanwhile, currency markets are expected to remain rudderless this week. The fragility of the global recovery will remain a key focus for this week. Although equity markets are likely to continue their recent push higher as they bounce back from oversold levels, there is little scope for short-term interest rates to move higher and thus FX markets may struggle to find a theme.

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