Dynamics that were similar to euro (talking in the previous part of these series of articles) in second half of year was shown also with the British pound. Problems in economy of Foggy Albion are also visible, but their character differs that we watched greater part of year in the USA and continental Europe a little. Here already throughout all 2010 the rate of inflation in Great Britain exceeds a target index (2 %) Bank of England. The similar inflationary background restricts a regulator in actions on softening of a monetary policy. As a result the committee on a monetary and credit policy of Bank of England in 2010 has occupied a waiting attitude that against QE2 in the USA has allowed pound to become stronger against dollar in second half of year.
Analyzing macroeconomic indexes of the British economy, we come to a conclusion that the situation here is not the most iridescent, volume of manufacture is at level of 1993, and real value of internal national produce couldn’t win back yet and half of crisis falling. During too time, the next years the country government plans the scale measures of budgetary consolidation assuming essential abbreviation of state expenditures. On this background to expect fast rates of recovery of economic activity it is not necessary.
The important factor for pound there is also a state of affairs in Euro area economy as the British banks are the active creditors of some members of the currency unit. For example, banks of the United Kingdom hold on the balances the Irish state bonds and corporate debt papers on the total over $140 billion Therefore any peaking of debt “illness” in Europe will immediately affect and a financial system of Foggy Albion.
The above-stated factors, under our forecasts, will contain growth of quotations of pound during a greater part of 2011. In particular, the expected range of driving on steam pound-dollar in coming year, under our forecasts, will make $1,45 – $1,68 for unit of the British currency.
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