LONDON: Sterling climbed on Monday, holding above a 14-month low hit against the dollar at the end of last week, with British wage data and a quarterly report on inflation from the Bank of England on investors' radar.
If Wednesday's wage data shows subdued growth, that would boost market expectations that the first rate hike from the BoE is not likely until the second half of 2015, keeping sterling under pressure.
The same day's Inflation Report could provide mixed signals. A downward revision to near-term inflation forecasts on lower energy and food prices is likely to accompanied by upward revisions to longer-term forecasts.
Economic growth forecasts might be tweaked lower to factor in renewed uncertainty from the euro zone, which is facing a slowdown and the threat of deflation, analysts said.
Sterling was up 0.1 percent at $1.5886, having hit a low of $1.5791 after U.S. jobs data on Friday, its weakest since September 2013. The dollar was weaker, with investors taking profits on bullish bets after the jobs report.
The U.S. jobless rate fell to a six-year low of 5.8 percent, pointing to an economic resilience in the face of slowing global growth that should see U.S. interest rates rise some time next year.
"The BoE's views on weak price pressures have strengthened over recent months and, when you consider that alongside signals of UK economic momentum slowing, Governor (Mark) Carney might announce that a potential rate rise will be delayed to after spring 2015," said Jameel Ahmad, chief market analyst at FXTM.
"If sterling/dollar does move to the upside before then, it will be due to further profit-taking on the dollar."
Investors have pushed back expectations for a first rise in British rates from this year into the second half of 2015, sending the pound down 8 percent against the dollar since mid-July. The BoE kept rates unchanged last week.
The euro was steady against the pound at 78.50 pence .
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