GBP: British Pound sales continues for four days

At the Forex currency market the British Pound Sterling rate continues to be under selling pressure on Friday, due to the ongoing negative factors of the external background.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it goes down, trading volume is also reducing, which indicates sell signal. Stochastic Oscillator is coming back to the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6240 the pair will go to 1.6210 and 1.6180. If downward breakdown does not take place the pair will consolidate close to the current levels.

General Director of the Confederation of British Industry (CBI) Mr. Cridland believes that Finance Minister of the UK Mr. Osborne does not need to glance back at the lack of growth of the British economy during implementation of measures to reduce government spending. “We continue to expect that recovery will proceed this year as well as the next year, however recovery pace will be slow, - thinks CBI. CBI expects that the British economy will grow by 1.7% this year; and by 2.2% in 2012. Reduction in the government spending will help decrease GDP by another 0.75% on average

We would remind that at the regular meeting the Bank of England left interest rate unchanged at the level of 0.50% per annum, volume of assets purchase was also kept  unchanged- at the level of stg200 billion. Comments of the regulator did not incorporate new developments, and it seems natural; the situation in the British economy is far from being stable

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 Bank of England believes that by the end of this year interest rate will reach the level of 0.75%, while in QIV, 2012 it will be 1.75%, i.e. the Bank has made provisions for one fact of the rise in the indicator in 2011 and four in 2012. Inflationary prospects were described as “uncertain” and Central Bank admits that CPI will reach the level of 5% this year. Although the Bank of England expects that CPI will grow slightly above 1.9% in two years time.

 

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