Sterling lower at the beginning of European part of the session

Monday, Dec 14 2015

There are no major data releases from the UK today. Sterling fell overnight as traders are still weighing on recent BoE stanzas, as well as anticipating UK CPI and job figures, but with the focus on Fed's interest rate decision. Last week members of the Bank’s nine-member monetary policy committee (MPC) voted eight to one to leave rates at 0.5%, where they have been since March 2009, in a repeat of voting numbers seen in recent months. Sticking to his recent stance, only Ian McCafferty voted for a rise to 0.75%.

Most economists expect the Bank of England to raise interest rates in the second quarter of 2016, and many see other MPC members soon joining McCafferty in voting for increases. But markets are not pricing in a move until around August. Inflation was negative for a second consecutive month in October, according to the latest official figures, and it has been well below the Bank’s 2% throughout this year. The Bank’s latest concerns about inflation follow another sharp fall in oil prices this week.

Britain's economic performance has been "saluted" by the International Monetary Fund, which has acknowledged the country's strength in rebounding since the financial crisis. Christine Lagarde, the IMF's managing director, said that the UK's authorities had "managed to repair the damage of the crisis", and that the fund was "saluting that performance".

Sterling is currently being traded around 1.5180 area. Pair is likely to find support around 1.5150 handle and resistance above 1.5230 level. There will be no major data releases later today.

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