GBP: British Pound remains under the selling pressure

At the Forex currency market the British Pound Sterling continues falling on Friday – the currency remains under selling pressure for the third consecutive session.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is moving along the signal line, not giving a clear signal. Stochastic Oscillator is falling in the neutral zone today, giving a pair sell signal.

Forex recommendations: in case of bearish scenario and the breakdown at the level of 1.6100 buyers’ targets will be the levels of 1.6080 and 1.6050.

Weak statistics released the day before shook the positions of Pound: retail sales excluding fuel in Great Britain fell by 1.0% m/m (+1.2% y/y) in February, level of retail sales fell by 0.8% m/m (+1.3%) y/y against the forecast of reduction by 0.6% m/m.

The day before Spencer Dale of Bank of England said he would be ready to reverse his decision on the key interest rate in case the inflationary pressure in the country continued to ease. He voted to raise the key rate this month guided by the inflation indicators.

Thus Dale is not confident in the stability and strength of the economic recovery in Britain.
Thus, according to the Minutes of meeting of the Bank of England 6 members of MPC voted for keeping interest rate at the previous level. In addition, 8 people were for preserving current volume of the assets redemption program. Posen voted for the growth of QE by 50 billion pounds.

Therefore, balance of forces in the Monetary Committee has remained unchanged, which frustrated bulls who expected indications of imbalance. Following the meeting of the Bank of England it became known that interest rate was kept at the previous level of 0.50% per annum, volume of debt securities was also left unchanged – 200 billion pound sterling.

Levels of inflation in the UK have been above the levels indicated by the regulator for over a year already, increasing pressure on the recovery of the British economy which is not too steady. The increase of VAT in the UK at the beginning of this year contributed to the growth of prices in British shops – the index rose to 24 month highs on annual basis in February.

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