Here we look look at the dollar sterling forecast for 2012 and take a month by month look
at how the dollar and sterling is performing and see if we can spot trends to make an accurate dollar sterling forecast
for the rest of the year. Go to the sterling forecast on our navigation for a weekly update on its current performance.
The US dollar forecast for 2012
is a mixed one. The future of the US dollar in 2012 is by no means certain. The Government have pumped vast amount of cash
into the economy through their programme of quantitative easing and as a result the US dollar has lost value. The US has not
yet raised its interest rates whilst the European Central Bank has. This has not been good for the dollar. However the dollar
is the currency of choice for many people and they have a strong trading record. In the last few months of 2011
the dollar became an increasingly popular choice for investors looking for a safe haven for their cash, along with gold and
the yen.
In 2012 we may see certain states in the USA revealing the extent of their debts and the need for Government
help. Fortunately for the dollar, sterling also is not having an easy time as the Bank of England has not raised
its interest rates whilst Eurozone countries have seen an interest rate hike, which temporarily boosted the euro. The
European Central Bank is having to help certain European countries such as Greece and Ireland and others are set to follow.
The market is now jittery that the euro is in trouble and that countries such as Greece cannot cope with its loan repayments.
This has been going on for most of the last 12 months and until the G20 leaders can reassure the financial markets
that Greece is stable, the euro will continue to decline.
The UK has seen its currency decline vs the euro. UK interest
rates may go up in early 2012 and this would result in a boost for the currency.So in terms of where to
invest in the world, the dollar could be seen as a good bet due to being undervalued and not having the links that the UK
does to countries in Europe and more importantly their banking system, the dollar remains a better bet for short term investment
than the euro and sterling.
Good economic data that comes out of the US boosts the dollar but the world markets are still
subject to ups and downs and this is causing the major currencies, including the US dollar, to swing up and down from day
to day. Large gains and large losses are easily made with the current volatility. This was the pattern in 2011 and will most
likely continue into 2012.
