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Sterling rebounded after initial decline

Monday, Dec 08 2014

There are no data releases from the UK today, however, Sterling aimed lower, initially in the session, but managed to rebound, currently being traded around 1.5590 level. Sterling is still being influenced by NFP figures, released on Friday, that showed much better than forecasted data. This indicates stability on US labour market as well as fall in number of unemployed, which could mean that Fed could be raising its interest rates sooner than expected.

 

 

Also, BoE released its interest rate decision last week. As it was widely expected interest rate was unchanged. UK economy is also affected by downbeat in Eurozone economy. Despite stability in labour market, there are still concerns on falling inflation and wage prices growth.

 

Furthermore, in May UK parliamentary elections will be held, so we cannot expect that BoE will raise interest rates before third quarter of 2015, which is supported by latest BoE officials statements.With holiday season coming we can expect growth in industrial production and retail sales, so it is likely that sterling will rebound slightly within next few sessions.

 

Rest of the session should be a steadier one since there will be no major data releases from USA. Pair is likely to find support around 1.5540 level and resistance above 1.5630 area.

Last modified on Tuesday, 09 December 2014
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