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The British Pound Sterling is traded upward at the Forex currency market on Friday morning in response to investors' favourable sentiment in advance of Christmas.

Forex forecast: MACD indicator for the pair GBP/USD is traded upward in the negative area and is giving a buy signal, while volumes are average. Stochastic Oscillator is growing in the neutral zone and is giving a similar signal, however it is ready to shift into sideways movement.

Forex recommendations: in case of breakdown at the level of 1.5700, target for buying will be the levels of 1.5710 ? 1.5730.

Activity in the currency is minimal today, which is logical in advance of the Catholic Christmas. Most likely we are not going to see anything fundamentally new in the pair until New Year.

Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3, yesterday's statistics supported buyers. The index is above preliminary assessment, which was appreciated in the market.

Great Britain still tries to keep away from European debt problems: yesterday, during discussions of ways to increase International Monetary Fund with the help of collective contributions, London stated that it would announce its decision at the beginning of 2012. Minutes of the last meeting of the Bank of England has been released this week: according to the document all members of the IFA (ratio 9-0) voted for maintaining interest rate at the current level. In addition, the Committee believes that changes in the program of assets purchases will not bring significant benefits; however, if inflation does not subside, the increase in the volume of the assets purchase program can be required. Sharp decrease of inflation is still expected in the first 6 months of 2012, the prospects of CPI in the next 6 months look more blurry.

It is also worth noting that the Bank of England expects stagnation in the economy in the next quarter and GDP growth in Q1 next year. 
It became known earlier that consumer confidence GFK/NOP in the UK declined to-33 points in December against the level of -31 points in November. Judging by small real expenditures and low income of households, the British are getting more conscious about spending. Index is still at 35-year lows and presently regarded as a negative indication.

The Bank of England announced earlier that average annual inflationary expectations reduced to 4.1% in November against 4.2% in August. At the same time, two-year inflationary expectations were at the level of 3.4% (3.5% previously).

According to Markit estimates, PMI CIPS amounted to 52.3 points in November against 53.9 points earlier; however dynamics in the sector of new houses is positive and upward trend in the sector can be interpreted as an indication of the future stabilization. In general, the latest data from Markit looks good and does not rule out prompt recovery of the economic sectors in the future. It became known earlier that CPI in the UK increased by 0.2% m/m (+4.8% y/y) in November, as expected. British inflation slows down its pace, however the index is still too far from the target level of the Bank of England.

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