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Sterling higher in a quiet Monday trade

Monday, Nov 09 2015
There are no major data releases today, with Sterling slightly higher after large decline on Friday due to NFP figures. Also, markets are being influenced by latest BoE interest rate decision and the following minutes. The Bank froze rates at 0.5% again yesterday with Ian McCafferty the only member of the nine-strong monetary policy committee voting for a hike. It said inflation, running at minus 0.1 per cent, would return to the 2 per cent target ‘in around two years’ if rates rose as expected by markets.
 
The forecasts appeared to endorse the view that rates would stay on hold all of next year and rise to 0.75 % in early 2017. Governor Mark Carney said the Bank would not consider unwinding its £375bn quantitative easing program until rates hit 2 per cent – something not expected until the end of the decade. UK rates last rose in July 2007, from 5.5% to 5.75%, before falling in the financial crisis, reaching an historic low of 0.5% in March 2009. Analysts said the dovish signals from the BoE, which flagged risks to UK growth from external developments, showed it was growing increasingly edgy about the currency's recent strength.
 
 Carney linked UK disinflation risks to sterling strength, commodity weakness and Asia's economy showing additional signs. Sterling is currently being traded around 1.5080 area. Pair is likely to find support around 1.5050 handle and resistance above 1.5130 level. There will be no major data releases in the rest of the session.
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