Closed in NY at $1.5788 after sterling had come under strong negative pressure during the session as traders adjusted positions ahead of today’s UK Q4 GDP release at 0930GMT with its possible negative implications if the headline numbers comes in at negative. Cable saw lows of $1.5758, with strong demand in euro-sterling, linked to general euro demand positioning ahead of today’s LTRO repayment announcement at 1100GMT, drove this rate through stg0.8450 on to stg0.8481. Despite this late recovery, and reports of decent demand seen in sterling-yen through Asia, sterling has continued to trade with an underlying softer tone, cable easing down to $1.5762 ahead of Europe, while euro-sterling saw an early low of stg0.8463 before edging back to pressure the stg0.8480/85 area. Weak talk suggesting the Q4 GDP first read could show a positive read (+0.2% mentioned) though looking at sterling’s current performance it takes a lot of believing. However, analysts have suggested first read could be based mainly on Oct, with the poorer months of Nov-Dec to gradually have more influence in the revisions. Cable support $1.5755/45, $1.5725/20 ahead of $1.5700. Resistance $1.5800, stops $1.5810.
EasyForexNews Research Team