The POUND STERLING has suffered from several sessions of downward drift against the other major global currencies as investors factor-in a reasonable percentage chance that new Governor Mark Carney will mark his first Bank of England policy announcement with an increase to Quantitative Easing on Thursday. It would appear more likely that the Bank will opt to attempt to alter UK economic participants’ behaviour by confirming that British interest rates will remain at an ultra-low level for several years. In the meantime, Sterling is expected to trade with a NEUTRAL TO NEGAIVE bias. The EURO has managed to gain a small amount of ground against the Pound so far today as investors price in a higher likelihood that Thursday will bring a loosening of monetary policy from the Bank of England than from the European Central Bank. This morning’s lower than anticipated whole of eurozone Producer Price Index inflation numbers failed to suppress the euro and the single currency is expected to trade on a NEUTRAL footing in the short term. The GBP EUR exchange rate stands at 1.1648. The AUSTRALIAN DOLLAR has given up ground against Sterling today following last night’s Reserve Bank of Australia policy announcement, sending the GBP AUD exchange rate up to 1.6616 earlier. The RBA decided to maintain its overnight cash rate at its current record low of 2.75%, as per expectations. However, it was the board’s accompanying statement which predicted that there would be a further weakening of the Australian tender in the medium term which hurt the Aussie, leaving the outlook for the AUD as NEGATIVE. The US DOLLAR has outperformed almost all of the other sixteen most actively traded global currencies so far today thanks to a generalised ‘risk off’ trading environment. With stock indices shedding ground, and recent American data releases providing cause for some optimism, the Greenback is expected to trade with a POSITIVE bias moving forward. The current GBP USD exchange rate sits at 1.5185. - See more at: http://www.currencynews.co.uk/forecast/20130702-7238_exchange-rate-forecasts-pound-sterling-euro-us-dollar-australian-dollar.html#sthash.Efh2eR7m.dpuf

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