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• NZD: New Zealand Dollar is descending [11/10/2011]
• AUD: sales of Australian Dollar do not subside [11/10/2011]
• JPY: Japanese Yen remains in the narrow trade range [11/10/2011]

GBP: British Pound is growing slowly

At the Forex currency market the British Pound Sterling rate continues to grow unsteadily on Tuesday, keeping up with the tendency which has started earlier this week.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and continues to go up, giving a pair buy signal. Stochastic oscillator continues to go down today, being in the neutral zone.

Forex recommendations: taking into account external background we can expect that purchase will increase but only in case of breakdown at the level of 1.6170, after that buyers’ targets will be the levels of 1.6240 and 1.6275.

The following UK data was released today:

– Retail sales BRC in January: +2.3% y/y, total sales +4.2% y/y;

– Index of houses prices RICS in January: -31% against the forecast of  -38%  and -39% in December.

In general statistics turned out to be positive; however different companies appear to have different points of views, while assessing the growth of prices. 

The UK houses prices reduced by 0.7% in November-December against the previous growth by 0.8% therefore, real estate prices continue to drop consistently, in spite of attenuation of the sales pace. According to the study of RICS, a number of new proposals have also reduced. Thus, there are all grounds for the maintenance of the precarious position in the real estate sector. It is interesting that earlier Halifax released information according to which houses prices in January increased by 0.8% m/m (-2.4% y/y). It is still unclear what criterions different companies apply for their evaluations of the same sector.

Note that study of the National Institute of Economic and Social Researches “NIESR” agrees with the market sentiments. Thus, the Institute believes that the Bank of England can raise interest rate three times this year, with the main target to control the growth of consumer prices.

NIESR expects that the rate will increase to the level of 1.75% against the current values by the end of 2011. At the same time it has also upgraded its inflation forecast to 3.8% for 2011 against the previous level of 2.8%. It is expected that unemployment rates will increase to 8.7% this year against the current level of 7.8%.

Earlier NIESR has already made not too rosy forecasts. Thus, the Institute recommended the UK government to postpone for some time a program of budget expenses reduction, since the strategy can bring huge losses in economy, rather than benefit. The statement made by the UK Prime-Minister Cameron earlier partly proves that this year will be extremely difficult for the country’s economy. We would remind that as it became known on Friday consumer confidence in the UK fell to -29 in January, as per GFK/NOP, against the previous level of -21. Thus, the index is at its lowest level since 1994, which indicates consumers’ skepticism regarding prospects of the economy in the nearest future.

 

 

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