Closed in NY at $1.6072 with early demand, following the weekend cut in China’s RRR by 50bps, taking the rate up to overnight highs of $1.6080 as early market reacted to Aussie’s lead. Rate reversed off highs as it tracked EUR/USD drop below $1.2900 as Greek far Left party Syriza announced it would not be taking part in coalition talks later today. EUR/GBP dropping back from stg0.80345 to stg0.8016 diverted some of the downside pressure, providing cable with support at $1.6054 before it settled between $1.6060/70. The cross settled between stg0.8020/30 ahead of the European open. Sterling remains firm vs the euro, as the single European currency remains under pressure from the current Greek impasse, leaving the situation open for a possible Greek default/exit from the euro, but this week’s BOE Inflation Report is widely expected to be dovish, due to Eurozone problems, which in turn is affecting UK growth, and will provide a counter. USD and JPY remain safe havens of choice and expected to keep downside pressure on cable. Cable bids $1.6060/50, $1.6040 stops. Offers $1.6080, $1.6100.
EasyForexNews Research Team