Forex Blog
Blog-FX.Com

At the Forex currency market the British Pound Sterling rate continues to move upward on Tuesday as a part of correctional rebound.

Forex forecast: MACD indicator for the pair GBP/USD has broken through the signal line from top to bottom and is traded in the negative area, giving a sell signal. Stochastic Oscillator tends to go out of the oversold zone and started to shape a signal for moderate purchases.

Forex recommendations: in case of break down at the level of 1.5530, target for buying will be the levels of 1.5500 and 1.5520 as part of rebound. If favourable environment does not last long, the Pound will revert to the sales at around 1.5480.

Yesterday the head of the Bank of England Mr. King said that inflation will go down considerably, as currently slow growth of wages and spare capacity of the economy are making progress in this direction. In the next 6 months however drastic changes cannot be expected: CPI will remain in the channel of the existing rates.

This is the first time in the last few months when supposition about reduction of the inflation level was stated.  Representative of the Bank of England, a former “Hawk”, Mr. Dale noted that inflation rate would drop sharply next year; meanwhile the Bank of England would continue to stimulate economy.

According to representative of the Bank of England Mr. Weale, economy of the country will not achieve pre-crisis levels until Q3 2013, and growth of capital will support consumption. He believes that monetary policy alone cannot fix up economy and there is a high possibility that QE will be launched if the state of economy will not improve after the first round of stimulation.

Last 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.                                   

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.

Tags: