The British Pound Sterling rate is traded upward at the Forex currency market on Monday in response to stable external background.
Forex forecast: MACD indicator for the pair GBP/USD remains in the positive area; it is traded along the signal line and is not giving a clear signal. Stochastic Oscillator is going up in the neutral zone and is giving a buy signal.
Forex recommendations: in case of breakdown at 1.5860 the pair GBP/USD will go to 1.5870 and 1.5890.
The Pound gets support from stable external background and positive sentiment of investors who anticipate resolution on Greek problem that should remove from the agenda associated risks.
According to Rightmove, house price index in the UK rose by 4.1% m/m (+1.4% y/y) in February against preliminary expectations of decline of 0.8% m/m. Thus, the index demonstrates maximum increase since April 2002 on monthly basis.
The rise in price was triggered by small number of deals in the market and some easing of the lending conditions.
It became known earlier that consumer confidence Nationwide increased to 47 points in January against the level of 38points in December. The report provides the following information: index of expenditure amounted to 78 points against previous 77 points; index of business expectations rose to 64 points versus 50 points earlier. Therefore, confidence of British consumers has recovered on the first month of the year from the record lows; nevertheless buyers remain cautious, especially in regards to large acquisitions.
At the regular meeting in February, the Bank of England increased asset repurchase program by 50 billion pounds, to the level of 325 billion pounds, as expected. Mr. Osborn stated commenting this decision that the increase of QE will help achieve inflation target (official target is 2% and it has not been changed for about two years.) According to Osborn, current monetary policy is still the primary instrument of influence on economic changes. Analysis of the Bank of England proved efficiency of QE. The data released on Tuesday was quite good: CPI decreased by 0.5% m/m (+3.6% y/y)in January against the level of +4.2% y/y in December. According to the data released at the end of last week, volume of production in the construction sector declined by 0.5% on quarterly basis (+0.9% y/y) in December against preliminary expectations of growth of 0.2%. Authorities have already reacted to this statistics, stating that the index cannot be the basis for revising country's GDP.
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