Opened early Europe at $1.5665 stg0.8379 GBP closed in NY at $1.5660, off FOMC inspired recovery highs of $1.5679. Holiday thinned Asia saw cable consolidate the move, with trade contained within a very tight range of $1.5651/65. The dovish comments from the FOMC, pushing out the next hike into late 2014, as well as leaving the door open to further QE, weighed on the dollar across the board, though GBP was seen as a laggard. EUR/GBP managed to edge back up to stg0.8376 in NY, after seeing lows of stg0.8311, the cross in Asia holding between stg0.8364/79. GBP extended highs into early Europe to $1.5700, as EUR/GBP reversed an early rally extension to stg0.83815 to stg0.81515 as it tracked EUR/USD moves. EUR/USD spike to $1.3174 took the cross back up to stg0.8393, with cable only able to extend its recovery to $1.5719 before real money sales pressed rate back below $1.5700. The dip met fresh demand, which was able to soak up reactive sales prompted by release of weak CBI data, but further real money supply kept rate pressed below $1.5700 into NY.
EasyForexNews Research Team