28, February 2013

GBP/USD (a 4-hour chart)

GBP/USD (a 4-hour chart)

GBP-UK GDP, Gross Domestic Product, the main measure of economic activity and growth was published yesterday.Still that data did not impact the market as it was expected.

The revised cost estimate is being confirmed, GDP forecast for for the 4th quarter of 2012 says that the UK economy shrank by 0.3% q/q in the final quarter of last year, after a brief return to growth of 1.0% q/q in the third quarter. Deteriorating economic conditions could revive fears of UK recession and keep triple GBP under pressure.

The deputy head of the Central Bank, Charles Bean and Paul Tucke0r, made a proposal to introduce two types of rates - and deposit base at the session of the British Parliament on inflation. Rate on deposits assumed from 0% to 0.5%, which is in theory will encourage business to invest in the development. They also spoke of the need to expand further the asset purchase program, this time by 25 billion pounds.

Pound was caught by bears in the downgrade last week. Markets will again focus on UK data to guide where to send currency.