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At the Forex currency marketthe British Pound Sterling rate continues to slide down on Friday morning,demonstrating weakness which is understandable.

Forex forecast: MACD indicatoris in the negative area for the pair GBP/USD and goes down, giving a sellsignal. Stochastic Oscillator is descending in the neutral zone, giving asimilar signal.

Forex recommendations: in caseof breakdown at the level of 1.5930, sale target will be the levels of 1.5910and 1.5890. If downward breakdown does not take place, the pair willconsolidate close to the current levels.

According to the forecast madeby NIESR, GDP in Great Britain will rise by 0.1% in June against the revisedlevel of 0.5% in May. It is logical, because economic situation in the UKremains tense.

It is possible that in the nearfuture confidence in financial and monetary policy will continue to decline inthe UK and it is a negative factor for the GBP. However, exchange rate remainslow which eliminates a chance of sharp collapse of the Pound. According toBarclays estimates, British Pound is going to be pessimistic in pairing withthe USD, which will be caused by weak demand in the country and probability ofa new stage of decline in confidence. Position of the bank of England does notfacilitate strengthening of the GBP.

As it became known yesterday,retail price index BRC in Great Britain rose by 0.5% m/m (+2.9% y/y) in Juneagainst the level of +2.3% y/y in May. Price index for food rose by 5.7% y/ylast month (+4.9% y/y in May). Increase in the index was the highest sinceOctober 2008, confirming the view that inflation is accelerating.

According to the latestinformation CPI in May amounted to 4.5%.

In addition, permanentemployment index KPMG/REC in the UK decreased to 52.2 points in June versus thelevel of 55.1 points in May. The meeting of the Bank of England finishedyesterday: interest rate was kept unchanged at the level of 0.50% per annum.Statements on the monetary policy have not been made. It is likely that therate will remain at the current level until Q1 2012.

The minutes of the meeting willbe presented on 20 July. 

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