GBP: It is a decisive day to British Pound Sterling today

At the Forex currency market the British Pound Sterling rate is in the range today, going down in advance of the decision of the Bank of England on the rate and follow-up comments of the regulator regarding anti-inflation strategy.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and it is moving along the signal line, not giving a clear signal. Stochastic oscillator remains in the oversold zone today, indicating continuation of sales.

Forex recommendations: in case of breakdown at the level of 1.6150 the pair will go to 1.6110 and 1.6050. Volatility in the pair can increase today, so be careful.

The decision of the Bank of England on the interest rate will be known in the mid-day, as well as comments in regards to the levels of inflation and anti-inflation strategy.    

   
Objectively levels of inflation 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. Meanwhile interest rate is kept at the level of 0.5% per annum. 

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. According to the estimates of BRC retailers’ prices rose by 2.7% y/y last month against the rise by 2.5% in January.

Thus, taking into account this factor as well, sooner or later the Bank of England will have to adopt measures aimed at reducing inflationary credibility.

The UK data released yesterday showed that balance of production volume in the manufacturing sector declined to 25 points in QI, as per EEF estimates, against the level of 33 points in QIV. At the same time, balance of new orders in the manufacturing sector of the UK decreased to 20 points in QI against the previous level of 32 points.

It became known earlier that according to the data from Royal Institute of Chartered Surveyors, house prices in the UK are becoming stable; prices balance increased to -26% in February against the previous value of -31%. At the same time prices balance still remains in the negative area, while house prices are at the highs of the summer last year.

All attention is focused on the Bank of England today.

 

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