Sterling rebounded despite rate hike concerns
After falling on Friday, Sterling managed to rebound in a less volatile Monday's session. The construction data, down 1.3 per cent on the year, were the latest to cast doubts on the pace of an economic recovery that had provoked expectations, now cooled, of a rise in interest rates around the end of this year.
Markets suggest the UK central bank will not boost its 0.5% main rate until late 2016 and its decision to hold fire yesterday was predicted by all 41 economists in a Bloomberg survey.
Forward contracts based on the sterling overnight index average suggest a full quarter-point increase won’t come until after November 2016. In the minutes, the Bank of England said the UK economy is withstanding pressures from the slowdown in the global economy.
Sterling is currently being traded around 1.5360 level. Pair is likely to find support around 1.530 level and resistance above 1.5380 area. There will be no major data releases in the rest of the session.
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