GBP: British Pound has slowed down its fall

At the Forex currency market the British Pound Sterling rate has slowed down its fall on Thursday morning; however it remains under sellers’ scrutiny.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it has returned to the sideways trend and is not giving a clear signal. Stochastic Oscillator goes down in the neutral zone and is shaping a sell signal.

Forex recommendations: in case of break down at the level of 1.6350, the pair will go to 1.6325 and 1.6310. If downward breakdown does not take place, the pair will consolidate close to the current levels.

According to the data released today, British consumers continue to lose confidence in the economy. As per Nationwide estimates, assessment indicator of the current economic conditions in July remained at the low levels, reducing to 49 points against the previous 51 points. Thus, the growth of the indicator in May was temporary   and was provoked by the royal wedding and since that time it is successively going down.

In general, levels of consumer confidence remain low, which adds dark tint to the gloomy picture of British economy.

It became known earlier that mortgage lending in Great Britain increased to 33.417 thousand in July, as per BBA estimates, against the previous level of 32.123 thousand. At the same time a number of loans for buying new houses reached the level of stg4.926 billion in July; refinancing of the loans issued earlier amounted to 26.043 thousand against 24.311 thousand earlier. In general, indexes of July showed that mortgage lending in the middle of the summer was the highest over the year.

House prices in Great Britain reduced by 2.1% m/m (-0.3% y/y) in August, according to Rightmove estimates; index of retail prices in the country fell by 0.2% m/m (+5.0% y/y), as per RPI estimates; while in June the indicator was at the same level of +5.0% y/y. 

It is worth noting that inflation in the UK remains unchanged on monthly basis in July (+4.4% y/y) against growth of 4.2% y/y in June. As it became known earlier net volume of borrowing in the public sector of Great Britain was at the level of -stg1.961 billion in July against the value of stg1.350 billion in June. In addition, other indices also showed that volumes of various public borrowings also went down, indicating fairly high level of effectiveness of the current economic programs.

Unemployment rate in the UK was at the level of 4.9% in July. At the same time, level of unemployed increased by 37.1 thousand. CPI in the UK fell by 0.1% m/m (4.2% y/y) In June against the forecast of growth by 0.2% m/m. Earlier Confederation of British Industry- CBI has reduced GDP forecast for the current year to 1.3% against the forecast of 1.7% in May. According to experts, sovereign crisis in Europe, debt problems in the U.S. and Japanese disasters will not enable British economy to strengthen considerably. Meanwhile, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if required.

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