Cable has managed to steady after the early sell off saw a session low 1.5244 posted. We’re presently back at 1.5275.
There is some caution ahead of the 09:30 GMT release of the latest Bank of England quarterly inflation report and accompanying Mervyn King press conference.
The bank will present its latest growth and inflation forecasts, and the markets will be looking for hints on future monetary policy.
The market got caught on the hop last week when the BOE surprisingly announced it was going to extend its asset purchase programme by £50 bln.
Hard to see cable rallying much until we see what the bank has to say regarding quantitative easing.
