GBP: British Pound tends to decline to new lows
At the Forex currency market the British Pound Sterling rate is traded downward, approaching new local lows at the end of this week.
Forex forecast: MACD indicator for the pair GBP/USD has broken through he signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic Oscillator remains in the oversold zone, maintaining a similar signal.
Forex recommendations: in case of break down at the level of 1.540, target for sale will be the levels of 1.5430 and 1.5420.
The British Pound is still under pressure, as Great Britain suffers seriously from the European debt crisis. There is practically no interest in risk among investors which is quite natural considering current situation.
In addition, the “Independent” informed on Friday that British Budget Committee intends to lower the forecast on labour market because a number of jobs in the private sector is going to be less than expected.
Representative of the Bank of England, a former “Hawk” noted that inflation rate will drop sharply next year; however the Bank of England will continue to stimulate economy. It is interesting that all monetary politicians are pretty positive that CPI will fall sharply, but no one has specified what factors will trigger these radical changes in the situation.
According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.
Discussion about levels of incentives and interest rates is still going on in Great Britain. Representative of the Bank of England Miles said earlier that with the development of the recovery process in the British economy, the rates shall revert to the normal levels. At the same time monetary politician stressed that uncertainty about income of households has increased sharply. Net income of the most households has decreased considerably.
Earlier this week, British Prime Minister Cameron noted that European panic was the reason for paralyses in the market. In the current situation recovery pace in Great Britain is too slow. The country has to resolve the issue of its own debts and not to look around at others. Presently, additional stimulation could be dangerous; therefore it has not been seriously considered. However, if Eurozone resolved its urgent problems, it would become a powerful catalyst for the British economy.
