Sterling steadies at $1.39 after best run since 2014

LONDON, Jan 22 (Reuters): Sterling steadied around $1.39 on Monday, with traders cautious about pushing the pound higher after five consecutive weeks of gains against the dollar - the currency's longest winning streak since 2014.

Data published on Friday showed speculators increased their net-long positions on sterling - or bets that it would rise - to the highest level in 3-1/2 years in the latest week, on the view that Brexit talks had so far gone relatively well and that the economy was ticking along better than some had expected.

Former Goldman Sachs economist and Treasury minister Jim O'Neill said on Monday morning that Britain's economy is likely to do better in 2018 than many forecasts suggest and the benefits of global growth in the coming years will "easily dwarf" any Brexit hit.

But some analysts say there have been few fundamental drivers behind the pound's 3.0 per cent climb against the dollar since the start of the year, that there remains a great deal of political uncertainty, and that sterling is due a correction lower.

"With speculative long positioning close to multi-year extremes, we advise against chasing the currency higher. If anything, we remain of the view that the currency is trading in overbought territory," said Credit Agricole currency strategists Manuel Oliveri.