GBP: British Pound Sterling is growing in the last day of the year

At the Forex currency market the British Pound Sterling rate is growing on Friday, supported by the investors’ positive sentiments. Nevertheless the GBP still remains in the range.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and continues to decline, confirming a previous sell signal for the pair. Stochastic oscillator is approaching overbought zone and giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 1.5490 the pair will go to 1.5520 and 1.5550. If nevertheless, the level of 1.5450 is exceeded, traders’ targets will be the levels of 1.5420 and 1.5390.

As the data released today showed, index of houses prices Nationwide increased by 0.4% m/m in Great Britain against the forecast of reduction by 0.3% m/m.

Situation in the real estate market in the UK still remains the hard part in the economy of the country. As it became known earlier houses prices in December fell by 3% on monthly basis (+0.4% y/y), as per RIGHTMOVE estimates. However the bulletin of the Bank of England released today showed that British households have already experienced the impact of significant budget reduction.

Statistics released before that was even more frustrated. RICS institute data showed that housing market in Great Britain is at the lows of 18 months. The main reason for this is the reduction of demand for houses. Thus, index of houses prices in London increased to -32% against the previous level of -49%; while index of new buyers’ requests dropped to -1-8% last month against the previous level of -12%.

CIPD, the UK Institute of Personnel Development believes that the situation in the employment sector can be complicated for UK economy in 2011, because unemployment rate can rise to 9% and employment can reduce to 200 thousand jobs.

According to CIPD estimates reduction in the public sector will amount to about 120 thousand jobs and about 80 thousand in the private sector. We would remind that British Government plans to reduce the number of staff in public sector by 330 thousand by 2015.

However, OBR, Committee on Budget Responsibility claimed that dismissal will be compensated by creation more that 1.5 million jobs in private sector. Anyhow, the year 2011 is not going to be easy for the UK economy.

Note that unemployment rate in the UK increased to 7.9% in QIII against the previous level of 7.8% and the forecast of 7.7%. Number of unemployed in the UK decreased only by 1.2 thousand against expected reduction by 3 thousand