According to various exchange rate forecasting agencies, the euro pound is expected to close at the 0.80 level in the exchange rate market. This is considering that the previous level before the said forecasted close was at 0.8271 in the middle of the trading day. This is the reason the outlook of many analysts says that it would really remain to be challenging for a while considering that the performance of the currency last year was a bit stronger compare to what is expected from it according to various UK data.
With the foregoing, some data centres suggest that the economy of UK is having more energy or momentum heading its way for the second quarter of 2012. Also, it was noted as well that the expected stronger growth in the market will definitely aid the deficit reduction programs of the government.
Moreover, on the other hand, this phenomenon is seen to help the GBP versus the other European currencies since it is specifically expected that the EUR/GBP will close in a lower level at 0.80. This is also seen as a way to correct the misalignment in the short-term valuation. Aside from that, the softer risks market was also noted to provide a greater level of challenge for the GBP against the JPY as well as the USD. As a matter of fact, the GBP/USD exchange rated seems to have rejected the break of above the moving average of 200d, which makes it contain a very strong topside resistance. Consequently, further falls are seen in these currencies.
For the outlook of the foreign exchange market, some financial institutions and think-tanks are working for a higher quantitative easing, which refers to an unconventional monetary economic policy that is being used in order to stimulate the economy whenever the conventional economic and monetary policies seem to be not working effectively. This is commonly being done by way of the central bank is purchasing financial assets in order to inject a pre-determined level or quantity of money or currency in the economy. Well, according to many economists, this may sound likely considering the current performance of the monetary policies being implemented in the region.