Sterling little changed in a steadier Monday's session

Monday, Jun 08 2015

There were no data releases from UK today so it is a steadier session for Sterling which is struggling to break above 1.53 handle while maintaining support around 1.52 handle. Markets are still weighing on recent UK data. Interest rates remained unchanged at 0.5% and we can expect that this will be the case till the end of the 2015. Inflation and wage prices are still in focus, with labour market showing stability and constant growth.

Sterling has also been hit in recent weeks by a run of weaker-than-expected data that has raised questions over the sustainability of the UK’s economic recovery. A purchasing managers’ survey released last week for the UK’s dominant services sector showed growth suffered its steepest slowdown in nearly four years in May. That followed GDP data that week that disappointed expectations of an upward revision for the first quarter.

Elsewhere, traders are still nervously watching events in Europe after Greece tied up a deal to delay its latest debt repayments. While the delay gives Athens until the end of the month to reach an agreement with its creditors as it looks to reform its bailout terms, the euro retreated against the dollar and yen on concerns that stumbling blocks remain.

A senior U.S. official denied earlier today a news wire report that President Barack Obama had told a Group of Seven industrial nations' summit that the strong dollar was a problem. Bloomberg News earlier quoted a French official as saying Obama had made the comment.

"The President did not state that the strong dollar was a problem," the U.S. official said. "He made a point that he has made previously, a number of times: that global demand is too weak and that G7 countries need to use all policy instruments, including fiscal policy as well as structural reforms and monetary policy, to promote growth."

Sterling is currently being traded few points above 1.5270 level, euro is slightly below 1.12 handle, while Aussie is around 0.7640 area. We can expect steadier rest of the session, since there will be no major data releases.

More in this category: « Gold prices rebounded at the beginning of the week NAB Business Confidence at the highest level since August »