GBP: The fall of British Pound can be continued

At the Forex currency market morning the British Pound Sterling rate slowed down its fall in the morning; however all factors which has brought along sale of the GBP are still in force.

Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area and goes down rapidly, giving a sell signal, while volumes are low. Stochastic Oscillator has come into oversold zone and is giving a similar signal.

Forex recommendations: in case of break down at the level of 1.6170, the target for sale will become the levels of 1.6150 ? 1.6120.

It became known yesterday that PMI CIPS in the manufacturing sector of the UK was at the level of 49.0 points in August against the forecast of decline to 48.6 points and the level of 49.1 points in July.

It is obvious now that the GBP cannot expect support from anywhere until significant improvements in the external background take place. Although technical rebound at the end of the week can become an exceptional option, however after that the pair will be on sale again.

Preliminary GDP in the UK increased by 0.2% on quarterly basis (+0.7% y/y) in Q2. The head of the Bank of England Mr. King noted this week commenting inflationary indices that, CPI can easily reach 5% and MPC can use interest rate or QE to control risks, if the need be.

Unemployment rate in the UK was at the level of 4.9% in July. At the same time, level of unemployed increased by 37.1 thousand. CPI in the UK fell by 0.1% m/m (4.2% y/y) in June against the forecast of growth by 0.2% m/m.

As it became known earlier net volume of borrowing in the public sector of Great Britain was at the level of -stg1.961 billion in July against the value of stg1.350 billion in June. In addition, other indices also showed that volumes of various public borrowings also went down, indicating fairly high level of effectiveness of the current economic programs.

According to the data released today consumer confidence index GFK/NOP in the UK fell to -31 points in August against the level of -30 points in July. This index, which is one of the most objective assessment   of consumer confidence in the UK, is now below the lows of 1970, the time of recession in the country Note: that this index indicates consumers’ economic expectations for the next 12 months.

It became known earlier that index of consumer optimism in the service sector of Great Britain fell by 29% in Q3, as per CBI estimates, against the growth of 10% in Q2. At the same time, the Bank of England expected the growth of the index to the more optimistic levels in Q3 - statistics showed the opposite: optimism is fading away in the current quarter, and volume of business operations reduces in parallel. Despite such gloomy indications, CBI expects stabilization of the situation in Q4.