Cable remains on the back-foot despite December's above-forecast UK service sector PMI. This rose to a nine-and-a-half year high of 60.6, from 59.8 in November. It was expected to ease to 59.5. The strong number is good news for UK rate hawks touting a 25bp base rate hike to 5.25% next month (Feb 8), and a higher base rate beyond.
Long liquidation has played a major role in sterling's drop from yesterday's high of 1.9752 to today's five-week lows circa 1.9400. 1.9435 (Dec 18 low) is now a rebound resistance level. Upper obstacles include 1.9467 (Dec 19 base), and 1.9481 (yesterday's floor).
GfK's December UK consumer confidence gauge will be disclosed at 10:30GMT. Forecast: minus 6, from minus 7 in November. MPC ultra-dove David Blanchflower is slated to speak at 12:30GMT.
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