GBP: British Pound does not go beyond the range again

At the Forex currency market the British Pound rate goes down on Thursday – the pair GBP/USD has been jammed in the range 1.6100-1.6275 for the past three days.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not forming a clear signal yet. Stochastic Oscillator is giving a pair sell signal today, staying in the neutral zone.

Forex recommendations: in case of breakdown at the level of 1.6150 traders’ targets today will be the levels of 1.6120 and 1.6080.

Yesterday representative of the Bank of England Miles noted that according to regulator’s estimates the process of scrapping of the program of stimulation is quite slow. Miles believes that there is no need in monetary policy tightening as suggested by the supporters of the rate increase who keep eye on inflation levels. According to him, sharp tightening of the monetary policy will harm British economy, while inflation will revert to its key level of 2% by the year 2012.

 The data on the public sector borrowing released on Tuesday inspired players, making it possible for the Pound to add about 20 pips, however it was not able to reverse general trend: the volume of net borrowing in Great Britain reduced to  STG5.252 billion in January against the level of -STG0.095 billion a year earlier. Statistics released earlier showed that index of houses prices Rightmove increased by 3.1% m/m (+0.3% y/y) in Great Britain. It is worth noting that different agencies, which monitor real estate market in the UK, use different indicators and as a result published data from time to time differs diametrically.

Meanwhile Friday’s statistics gave chance for the Pound to soar up: level of retail sales rose by 1.9% m/m (+5.3% y/y) in January against expectations of grow by 0.2% m/m; net mortgage lending in the UK remained  invariable in January, at the level of STG 1.2 billion.

The Bank of England believes that risks of inflations have shifted upward at the moment and forecast of economic growth appears weaker than in November. In addition there are also risks associated with the household expenditure and the recovery of British economy is unlikely to be smooth and soft.

 
 

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