GBP: British Pound is in a state of complete uncertainty

At the Forex currency market the British Pound Sterling rate is traded downward on Friday, staying within the six-day range of 1.6260-1.6440.

Forex forecast: MACD indicator for the pair GBP/USD, has broken through the signal line from bottom to the top and is now in the positive area, maintaining a buy signal. Stochastic Oscillator has come out of the overbought zone and is giving a sell signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of break down at the level of 1.6310, the pair will go to 1.6290 and 1.6270. If downward breakdown does not take place, the pair will consolidate at the current levels.

It became known today that consumer confidence index GfK in the UK fell to -30 points in July against expectations of -26 points. This became a negative sign.

Representative of the Bank of England Mr. Miles noted today that there is still a chance that British economy will slide into recession, according to him, economic growth rate has slowed down and no one can deny yet that there are problems with inflation, CPI might also continue to grow in the short term. In consideration of the data of the last 12 months production output increased only by 0.8%.

Finance Minister Osborne is confident that Great Britain continues to hold a status of a quiet habour, because national authorities are taking tough measures on fiscal policy. He believes that the country shall continue to adhere to consolidation plan to get rid of debts; meanwhile the Britain is able to keep away from recession. Rejection from the fiscal plan at the moment will become a real threat to economic growth, thinks Osborne. 

As it became known earlier, preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2.

Moody’s believe that the UK DGP will rise by 1.6% this year; in 2012 – by 2.1%; while the growth in 2010 had been by 1.3%. At the same time unemployment rate will vary in the range of 7.8-8.0%. The forecast of the agency is based on the belief that the Bank of England will raise interest rate by 25 basis points before the end of this year and by another 1% -over the next year.

The report which was made public last week showed that CPI in Great Britain fell by 0.1% m/m (4.2% y/y) in June versus the forecast of growth by 0.2% m/m. In addition, overall trade balance in the UK amounted to -stg4.06 billion in May against the forecast of stg2.700 billion. It seems that the rise of imports in May triggered the growth of deficit in trade balance of the country. According to the data released earlier, unemployment rate in the UK amounted to 7.7% in March-May, level of unemployed reduced by 26 thousand within the same period. The level of unemployed rose by 24 thousand in June, while unemployment rate amounted to 4.7%.

 

 

 

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