GBP: British Pound has been declining for the third consecutive day

At the Forex currency market the British Pound Sterling rate continues to decline on Thursday.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and goes down, giving a sell signal. Stochastic Oscillator is descending in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.5960, the target for the purchase will be the levels of 1.5940 and 1.5910. 

If downward breakdown does not take place, the pair will consolidate close to the current levels.The meeting of the Bank of England will be held today; most likely the interest rate will remain unchanged at the level of 0.50% per annum. Follow-up comments of the head of the Bank Mr. King will be of interest.

The minutes of the last meeting of the Bank of England was made public earlier. It is clear now that only two aggressive monetary politicians have been left, they are: Wheal and Dale. A new member of the MPC, Broadbent who substituted a “hawk” Sentence, had joined a conservative camp. As a result, 7 votes were against the rise in the interest rate and two for it.

According to Barclays estimates, British Pound is going to be pessimistic in pairing with the USD, which will be caused by weak demand in the country and probability of a new stage of decline in confidence. Position of the bank of England does not facilitate strengthening of the GBP. It is possible that in the near future confidence in financial and monetary policy will continue to decline in the UK and it is a negative factor for the GBP.

However, exchange rate remains low which eliminates a chance of sharp collapse of the Pound.As it became known today, retail price index BRC in Great Britain rose by 0.5% m/m (+2.9% y/y) in June against the level of +2.3% y/y in May. Price index for food rose by 5.7% y/y last month (+4.9% y/y in May). Increase in the index was the highest since October 2008, confirming the view that inflation is accelerating.

According to the latest information CPI in May amounted to 4.5%.In addition, permanent employment index KPMG/REC in the UK decreased to 52.2 points in June versus the level of 55.1 points in May. Final GDP in the UK (third reading) increased by 0.5% on quarterly basis (+1.6% y/y) which agreed with the forecast. At the same time level of consumer spending fell by 0.6% on quarterly basis (-0.5% y/y) in Q1.    

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