GBP: British Pound is still under selling pressure

At the Forex currency market the rate of the British Pound Sterling still remains under pressure from traders today and goes down.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however slowed down, trying to identify a signal. Stochastic Oscillator goes down in the neutral zone, giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 1.6460 the pair will go to 1.6440 and 1.6420.

Deloitte & Touche LLP believes that the Bank of England will not raise rates until 2013 – according to observers, economic growth in the country is still poor, basic economic trend in the UK is also not too good, which encourages to leave rates at the current level at least until the end of this year and throughout the next year as well.

Inflation in the country is twice as high as 2% projected by MPC. Deloitte & Touche LLP indicates that British GDP will amount to 1.5% in 2011, the same as next year; while inflation will reach 4.5% in 2011 and 1.8% in 2012.

The head of the Bank of England Mervyn King believes that the rise in the interest rate can exacerbate problems of national debts. Such statement can be well regarded as support to “dovish” sentiments in the Monetary Committee.

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.
Statistics released last week showed that GDP in the UK rose by 0.5% on quarterly basis (+1.8% y/y) in QI, which agreed with the forecast and was taken favourably by investors at Forex. 

A meeting of the Bank of England will be held tomorrow.

 

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