08, May 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

The data on British industrial production is the main economical news this week. It is the key indicator of industrial and economic activity.

Recent improvements in the service and manufacturing purchasing managers' index showed encouraging signs that the UK may be on the way to recovery. According to forecasts the industrial production has increased by 0.3% m/m in March, after rising by 1.0% m/m in February. GBP should be able to maintain its strength, if the UK economic data continue to grow optimism and reduce the chances of further the Bank of England reducing.

The Monetary Policy Committee will maintain the current monetary policy and will keep the size of the asset purchase program unchanged at the May meeting and probably in the next few months until the new head of Carney, who will take office in July.

The pound may continue to attract attention as an alternative to European central banks currencies that are willing to aggressively ease the monetary policy.