FX.co ★ The fundamental analysis of the GBP/USD

According to Markit Exconomcis, the manufacturing sector confidence in Great Britain increased sharply in July, as the output and new orders extension kindled the Purchasing Managers Index upturn above 50 points level for the first time since March 2008. According to this data, the PMI in the producing sector rose in July to 50,8 against 47,4 in June. The result came in much better than the economists prediction expecting for index to rise to 47,8.
Finally, the British pound rallied sharply after it became known about the PMI tick up in July to 50,8, signaling the activity improvement in the sector. The GBP/USD pair jumped by 36 points and reached a new 2009 high at 1,6849.
In addition to this, for this week is scheduled the Bank of England meeting on monetary policy. As likely as not that the Monetary Policy Comittee of the Bank of England will keep the key interest rate unchanged and freeze the asset purchasing within the quantative easing program. Amid this, it is expected that the Bank of England will raise slightly its consumer price index forecast, compared to the estimate announced in May. These actions will point to that the Central bank suggests that the carried out policy executes its functions
and that the country\'s economy prospects are improving steadily, though, the Committee will probably hint that securities purchase freeze within the quantative easing program may be just temporary. Generally, the Commettee\'s decisions must support the British pound this week.

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Analyst: Vladimir Donin