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At the Forex currency market the British Pound Sterling rate continues to slide down gradually on Wednesday because local economy does not give rise for optimism.

Forex forecast: MACD indicator is in the negative area for the pair GBP/USD and goes down, giving a sell signal. Stochastic Oscillator has reversed in the neutral zone, pushing away from oversold zone and started to slide down, gathering pace.

Forex recommendations: in case of breakdown at the level of 1.6020, the target for the purchase will be the levels of 1.6000 and 1.5980.

If downward breakdown does not take place, the pair will consolidate close to the current levels.As it became known today, retail price index BRC in Great Britain rose by 0.5% m/m (+2.9% y/y) in June against the level of +2.3% y/y in May. Price index for food rose by 5.7% y/y last month (+4.9% y/y in May). Increase in the index was the highest since October 2008, confirming the view that inflation is accelerating.

According to the latest information CPI in May amounted to 4.5%.In addition, permanent employment index KPMG/REC in the UK decreased to 52.2 points in June versus the level of 55.1 points in May.Final GDP in the UK (third reading) increased by 0.5% on quarterly basis (+1.6% y/y) which agreed with the forecast. At the same time level of consumer spending fell by 0.6% on quarterly basis (-0.5% y/y) in Q1.

The minutes of the last meeting of the Bank of England was made public earlier. It is clear now that only two aggressive monetary politicians have been left, they are: Wheal and Dale. A new member of the MPC, Broadbent who substituted a “hawk” Sentence, had joined a conservative camp. As a result, 7 votes were against the rise in the interest rate and two for it. The Pound responded with a sharp decline.

It became known last Friday that British manufacturing industry has slowed down its growth; as per CIPS/Markit estimates PMI index amounted to 51.3 points in June against the revised level of 52.0 points in May. The data released earlier showed that volume of production in the service sector of Great Britain declined by 1.2% m/m (+0.8% y/y) in April. Net mortgage lending totaled to Stg1.098 billion in May versus stg1.047 billion in April.

Meeting of the Bank of England will be held on Thursday and decision on the interest rate will be made there. Surprises are not expected. Most likely the rate will be left at the level of 0.5% per annum. 

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