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The British Pound Sterling rate is growing moderately at the Forex currency market on Wednesday, since positive factors are back in the market in advance of the European events scheduled for the end of the week.

Forex forecast: MACD indicator for the pair GDP/USD is traded in the negative area; it has started to go up and is shaping a buy signal. Stochastic Oscillator is going down in the neutral zone and is giving a sell signal.

Forex recommendations: in case of breakdown at the level of 1.5630 the target for buying will be the levels of 1.5640 and 1.5650. If upward breakdown does not take place, target for sale will be the level of 1.5580.

The Bank of England announced about introduction of an additional instrument ensuring liquidity –ECTR. The objective of a new monetary mechanism is to reduce the levels of risk caused by European debt problems. With the help of this method the Bank of England can guarantee the sufficiency of the capital for commercial financial structures.

The data released yesterday showed that retail sales BRC in the similar trading floors of the UK fell by 1.6% y/y in November against the forecast of -0.5%. It was the lowest level of the index since May this year.

Statistics released earlier this week showed that PMI index in the service sector MARKIT/CIPS soared to the level of 52.1 points in November against the forecast of 50.7 points. It became known earlier that PMI index in the manufacturing industry amounted to 47.6 points in November, as per CIPS/MARKIT estimates. The index is above expectations which supported growth of the Pound. 

Activity in the British construction sector declined in November, which was demonstrated by statistics released at the end last week. According to Markit estimates, PMI CIPS amounted to 52.3 points in November against 53.9 points earlier; however dynamics in new houses is positive, and it upward trend can be interpreted as an indication of the future stabilization in the sector.

It became known last week that rating agency Fitch did not exclude the probability that the UK ranking could be downgraded, as national budgetary reserves have been rather depleted.  The agency believes that economic growth rate in the UK will slow down and influence of the European debt crisis will increase, which eventually will put in question current rating of the country.

According to representative of the Bank of England Mr. Weale, economy of the country will not reach pre-crisis levels until Q3 2013, and growth of capital will support consumption. He believes that monetary policy alone cannot fix up economy and there is a high possibility that QE will be launched if the state of economy does not improve after the first round of stimulation. Weale also indicated that there are signs of new recession.

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