At the Forex currencymarket the pair GBP/USD has increased at the closing session on Monday amid thesurge of market enthusiasm and overall weakening in the American currency.
Forex forecast: MACDindicator for the pair GBP/USD remains in the positive area; it has shifted tosideways movement, and is not giving a clear signal. Stochastic Oscillator isgrowing in the neutral zone and is giving a buy signal.
Forex recommendations:in case of breakdown at 1.5930, the pair GBP/USD will go to 1.5950 and 1.6010. The specified narrow range bearsstrong resistance for pair’s quotes, at the same time long-term trend is stillupward.
The data on thebalance of foreign trade was better than that in December.
However, the Pound’s goodspirits were spoiled at the end of the week by the other data: volume of productionin the construction sector fell by 2.3% y/y in January; volume of industrialoutput declined by 0.4% m/m (-3.8%y/y).
Index of consumer sentiment GFK/NOP was at thelevel of -29 points. House prices index Hometrack remained unchanged in onmonthly basis in February (-1.4% y/y).
Estimates of GFKNOPand that of the Bank of England showed that annual inflation expectationsamounted to 3.5% in February versus estimate of 4.1% in November.
Representative of theBank of England Mr. Broadbent noted last week, that he did not supportabolition of the economic stimulus program in the short term. He believes thatscrapping of the stimulus program could well grounded later but only ifdramatic improvement will be made in the lending and financing sector.
Representative of theBank of England Mr. Miles noted earlier that inflation in Britain will continueto decline, and this will be triggered by reduction in a number of jobs andreserve capacity. At the same time, policy of quantitative easing will promotethe rise in assets price and increase in demand. Miles found it difficult toassess the impact of assets purchase; however he believes that if it were notfor QE, domestic demand would have been significantly affected.
Mr.Wealenoted earlier that the rates could be raised before the regulator would rollback stimulus measures. At the same time, Weale does not think that easy attitudeto inflation for the sake of economic stimulus is a good idea.
Unemployment rate was 5.0% in February, numberof unemployed increased by 7.2 thousand. Weak employment sector preventseconomic recovery of the country in general.
A meeting of the Bankof England which was held last Thursday demonstrated that a split of opinionsin MPC is still preserved. Interest rate was left unchanged at the level of0.5% per annum as well as the volume of QE. The program of assets repurchase QEwas increased by 50 billion pounds in February to the level of 325 billionpounds.