GBP: British Pound is growing on Tuesday

At the Forex currency market the British Pound Sterling rate consolidates amid the positive external background.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD  and it moves along the signal line, not forming a clear signal. Stochastic Oscillator has come into oversold zone today and is giving a pair buy signal.

Forex recommendations: if current external background is maintained and in case of breakdown at the level of 1.5580 buyers’ targets will be the levels of 1.5650 and 1.5700.

It became known today that consumer confidence index in Great Britain, calculated by GfK/NOP, has not changed in December and remained at the level of -21, while reduction to -22 was predicted.

The index of large purchases increased due to the rise of VAT level.
The data released earlier seemed mixed. Inflation in the UK increased by 0.4% (+3.3% y/y) in November against the growth by 3.2% y/y in October. The fact, that the rate has been growing for the ninth consecutive month made economists worried. It is possible that the Bank of England will have to raise interest rate earlier to demonstrate that the inflation is under control. Interest rate is at the level of 0.50% per annum currently, the decision to leave it unchanged was made a week ago. We would remind that the UK unemployment rate in QIII increased to 7.9% against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed reduced in Great Britain only by 1.2 thousand in November against expected reduction by 3 thousand.

As it is noted in the studies conducted by Markit company, sentiments of the British consumers have become less pessimistic; thus, current financial situation does not seem fatal to buyers; nevertheless no one has changed gloomy forecasts. Conclusions are made on the basis of the index of financial state of households, where the balance of households that are satisfied with their financial state has increased to the level of 39.9 against 38.9 in November. Although the indicator is located bellow the borderline level of 50 points.   

 

[More]