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Sterling slightly lower in a tighter range Monday trade

Monday, Dec 28 2015
With no major data releases on today, and with holiday season tighter range trading, markets are still speculating on fact is Sterling overpriced at the moment and when will BoE hike interest rates. Several Bank policymakers, including Governor Mark Carney and even hawkish rate-setter Martin Weale have played down the prospect of a rate rise in the next few months as a renewed fall in oil prices and weak wage growth keep inflation well below the Bank's 2pc target.
 
Deutsche Bank said more fiscal consolidation next year relative to this year would make it “challenging” for the Bank of England to raise interest rates if austerity weighed on growth. “[Since November] oil prices have fallen more and the inflation data are showing signs of slowing. So if we don’t have a hiking cycle in the first half of next year, there is a risk that we don’t have a hiking cycle at all.” Markets currently expect the Bank to raise rates in January 2017. 
 
Sterling is currently being traded around 1.49 handle. Pair is likely to find support around 1.4850 handle and resistance above 1.4930 level. There will be no data releases in the rest of the session.
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