Opened early Europe at $1.5672, stg0.7866, GBP closed in NY at $1.5676, off lows at $1.5671 and seen after rate had extended its corrective pullback off post UK CPI release highs of $1.5730. The move down was seen influenced by the general boost for the dollar provided by the release of stronger than forecast retail sales data. Cable continued to take direction from EUR/USD in Asia, as the cross was contained within stg0.7860/68, with rate initially squeezing to lows of $1.5669 before pushing up to $1.5680 into the Tokyo fix. With little corporate interest, due to Obon week, the expected Goto-bi day demand failed to materialize and spec longs were forced to cover. This move pressed cable below its earlier low, extending the base to $1.5664 before rate settled back between $1.5670/75 ahead of the European open. Sterling traded with a soft tone in early Europe, though respected the overnight range. Release of stronger than expected UK employment data and BOE Minutes, showing no rate cut had been discussed, took cable to $1.5700, but move was seen as short covering, not fresh demand.
EasyForexNews Research Team