GBP: British Pound grows again after correction
At the Forex currency market the British Pound Sterling rate started to grow today after three days of correction amid general optimism at the market.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is rising, giving a pair buy signal. Stochastic Oscillator continues to go down in the neutral zone, giving a pair sell signal.
Forex recommendations: off the market.
Feasible event scenario at Forex: in case of breakdown at the level of 1.6500 the pair will go to 1.6520 and 1.6535. If the level of 1.6480 is exceeded, the level of 1.6450 will be the target of reduction.
The data on the UK GDP for QI will be made public today which will increase the volatility of the Pound Sterling.
Minutes of the last meeting of the Bank of England was released earlier; it showed that balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still has no intention to start monetary tightening policy.
It is hardly probable that the rate will be raised before July-August this year.
Current budget of the UK, excluding intervention in the financial sector, showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.
The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.
According to the representative of the Bank of England Mr. Sentence, inflation in Great Britain can exceed the level of 5% soon. He believes that inflation will go up during the summer. “If we wait until all signals of inflation will turn from flashing yellow to red, it will be too late to raise interest rates from the accommodative level” he stressed in his interview to the foreign news agency.
