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GBP: British Pound is recovering in the end of the week
The British Pound Sterling rate is traded upward at the Forex currency market on Friday in response to optimism in of the markets.
Forex forecast: MACD indicator for the pair GBP/USD is traded in the negative area and is going down moderately, while volumes are increasing, and is giving a sell signal. Stochastic Oscillator remains in the oversold zone, giving a weak signal forgoing out of the bounds.
Forex recommendations: in case of breakdown at 1.5385 buyers' targets will be the levels of 1.5395 and1.5420 as part of correction.
At the meeting of the Bank of England which was held yesterday, interest rate was left at 0.50% per annum, volume of securities repurchase was also unchanged at 275 billion pounds.
In other respects, views of MPC remained unchanged: there is no need to revise interest rate, therefore the Bank will continue to monitor economy and inflation.
It is worth noting that the Bank of England expects economic stagnation in Q4 2011 and GDP growth in Q1 2012.Revised GDP in the UK rose by 0.6% q/q (+0.5% y/y) in Q3.
Statistics released earlier showed that the UK retail price index BRC increased by 1.7% m/m in December against the rise of 2.0% a month earlier. Thus, the index fell to 16-month lows, largely due to Christmas sales, when retailers reduced prices. Prices declined by 0.1% on monthly basis.
According to the data released yesterday, house prices in the UK fell by 16% in December, as per RICS estimates. The Pound has neglected this statistics, concentrating on the external background.
The data released earlier showed that PMI CIPS in manufacturing sector increased to 49.6 points in December against 47.7 points in November. The data is definitely positive; however the fact that the index is below the level of 50 points proves that downward risks are still preserved. The Bank of England announced earlier that average inflationary expectations reduced to 4.1% in November against the level of 4.2%in August. At the same time, the level of two-year inflationary expectations was around 3.4% (3.5% previously). Meanwhile, composite PMI in the UK rose to53.2 points in December against the level of 51.2 points in November.
