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At the Forex currency market the British Pound Sterling rate goes down slightly on Friday after yesterday’s highs.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and goes up, giving a pair buy signal. Stochastic Oscillator is growing in the neutral zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 1.6520 the pair will go to 1.6540. if upward breakdown does not take place, the pair will consolidate close to the current levels.

As the data released yesterday showed net volume of UK public sector borrowing in March  reduced (to 18.632 billion pounds) due to the reduction in  emissions  of the government bonds by the end of the fiscal year. Net demand of the British government in cash amounted to 139.6 billion pounds for 2010/2011 against expected OBR of 141.1 billion pounds.

Current budget of the UK without intervention in the financial sector showed deficit in the amount of 10.442 billion pounds in March against 11.468 billion pounds a year earlier.

The data released earlier showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March.  Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.
According to the representative of the Bank of England Mr. Sentence, inflation in Great Britain can exceed the level of 5% soon. He believes that inflation will go up during the summer. “If we wait until all signals of inflation will turn from flashing yellow to red, it will be too late to raise interest rates from the accommodative level” he stressed in his interview to the foreign news agency.  

Minutes of the last meeting of the Bank of England were released yesterday – balance of power in the Monetary Committee remained unchanged: 6:3 and the regulator still has no intention to start monetary tightening policy. It is unlikely that the rate will be raised before July-August this year.

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