GBP: British Pound came to a halt after rapid growth

At the Forex currency market the British Pound Sterling rate slowed down growth rate on Thursday after the rise in the middle of the week.

Forex forecast: MACD indicator for the pair GBP/USD started to grow moderately in the negative area, shaping a buy signal; however volumes are decreasing. Stochastic Oscillator continues to grow in the overbought zone, moving along the signal line and maintaining a buy signal.

Forex recommendations: in case of break down at the level of 1.5740, target for purchase will be the levels of 1.5750 and 1.5770. However, if specified level is not broken down, the pair will have a chance to resume its decline.

British economy has not changed significantly this morning.

Volume of retail sales BRC in the UK increased by 0.3 y/y in September. Thus, according to the survey of the British Consortium of Retailers volume of retail sales rose slightly on annual basis last month; however monthly dynamics is mixed. Prices for food continued to grow, demand for clothes and footwear fell despite the seasonality. Therefore, basic demand is minimal at the moment. Volume of production output in the UK increased by 0.2% m/m (-1.0% y/y) in August as became known yesterday, however did not keep the GDP from sales.

As the outcome of the meeting in October, the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, at the same time increasing volume of the assets repurchase program. Therefore, QE was increased to 275 billion pounds against the previous level of 200 billion pounds. In the follow-up comments the head of the Bank of England Mervin King said that the expansion of the assets repurchase program has been provoked by the slow growth of the global economy, however QE will have a positive impact on the British economy in the future. According to him these measures are preventive since Britain is in the middle of the drastic crisis now.

It became known earlier that retail price index BRC in the UK increased by 0.2% m/m (+2.7% y/y) in September. According to the agency’s estimate prices for food amounted to +0.1% m/m (+5.0% y/y) last month. As it became known earlier consumer confidence index Gfk in the UK rose to -30 points in September against -31 points in August. However, despite positive dynamics, index is still close to the historic lows and has not yet reached historic average.  The indicator has moved away from the bottom, nevertheless it is still too far from stability. Note that assessment indicator of general economic situation fell to -58 points over the last 12 months.