UK lending data was a bit firmer than expected in December; data showed stronger demand for mortgages and lending secured on housing, Scotiabank's Chief FX Strategist Shaun Osborne notes.

UK December lending data a little firmer than f/c

"Data also showed a strong jump in net foreign demand for UK gilts at the end of the year, suggesting foreign investors are looking through the recent concerns about the sustainability of the government’s fiscal plans amid the rise in global bond yields."

"GBP tested the 1.24 area briefly yesterday but the dip drew a positive reaction on the charts, forming a bullish “hammer” signal on the daily candle. Overnight gains have stalled around 1.2460— initial resistance now—however. Cable may have to retest the 1.2390/00 zone or 1.2460 before a stronger sense of direction can emerge."