Closed in NY at $1.6236 after bouncing back from a post Spain Budget announcement low of $1.6173 to $1.6244, the move tracking euro-dollar’s reaction. Rate drifted off to a session low of $1.6227 (23.6% $1.6173-1.6244) in Asia before picking up fresh demand. The recovery was aided by a strong bounce in euro-dollar, the rate moved up to an initial high at $1.6258 before extending to $1.6264 into the European open. Euro-sterling trade through Asia was contained by stg0.79525-0.7962. All week market talk has been about today’s ECB fix (1215GMT) and the fixing of the EU CAP payment to the UK (around E3.5bln). This known interest has been seen providing sterling with some added buoyancy though expect some volatility with this interest possibly opposed by end month European sovereign interest coming the other way, apart from other market participants’ manipulations. BOE FPC press statement due at 0930GMT provides domestic interest though Spain bank stress test results (possible Moody’s review of Spain), Germany Ifo to provide outside influence. Cable offers $1.6260/70, $1.6300/10.
EasyForexNews Research Team