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At the Forex currency market the British Pound Sterling rate is traded slightly upward on Tuesday.

Forex forecast: MACD indicator for the pair GBP/USD is traded in the positive area; it is descending moderately and is giving a sell signal. Stochastic Oscillator remains in the oversold zone, maintaining a sell signal and tends to go out of the zone.

Forex recommendations: in case of break down at the level of 1.5650, target for sale will be the levels of 1.5640 and 1.5630.  The pair can go up to 1.5700 as part of correction.

According to British Prime Minister Cameron, paralyses in the market were caused by European panic. In the current situation recovery of Great Britain is too slow. The country has to resolve the issue of its own debts and not to look around at others. In the current state of affairs additional stimulation could be dangerous; therefore it is not seriously considered.

However if Eurozone resolved its urgent problems, it would become a powerful catalyst for the British economy.

It became known yesterday that house prices Rightmove in the UK fell by 3.1% m/m (+1.2% y/y) in November. The Pound did not react to statistics too actively, since it had already been under pressure from sales.

Consumer confidence index Nationwide in the UK declined to the record lows of 36 points in October against the forecast of 43 points. Consumer expectations fell to 48 points against previous level of 62 points. It is a negative signal because steady economic growth cannot be expected without revival of consumer sentiments. In addition, according to the data released yesterday the Bank of England has revised its inflationary expectations, as per the Bank estimates, in three years time CPI will be 1.5%, while volume QE will be STG275 billion and interest rate will be consistent with market expectations.

The head of the Bank of England Mervyn King immediately noted that economic situation in Britain remains complex and growth of industrial output shall be practically zero since mid-2012, although in the short-term it will be weaker than previously expected. According to him, resources of monetary policy to stimulate economy are limited. According to observers from NABE, unemployment rate in the UK will be around 8.7% in 2012 against previous forecast of 8.5%; there is a chance that employment will increase up to 100 thousand in Q4 this year. It is expected that policy of the Bank of England will continue to be soft next year and GDP will amount to 2.2% in Q1 next year against predicted level of 2.5% in Q4 this year.

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