Closed in NY Tuesday at $1.5673, just off its session highs of $1.5675, seen after rate had been pressed to lows of $1.5571, the dip meeting strong sovereign support ahead of the recovery. The move up was seen in tandem with euro-dollar, as the dollar gave ground, though sterling was able to take back some lost ground from the euro, euro-sterling easing off Tuesday highs of stg0.8632 to stg0.8591 into the NY close. Cable extended recovery highs to $1.5684 in early Asia, dipped to $1.5664 before resuming its climb, touching an overnight high at $1.5690. Rate was holding back around $1.5675/80 into Europe. Euro-sterling was contained within stg0.8572/86 through Asia, opening Europe around stg0.8574. Focus today on the BOE Inflation Report at 1030GMT, inflation expected to be projected above the target in the forecast horizon, though downside risks likely to be reduced given weakness in the pound, strength of oil prices and higher asset prices. Market will look for comment on the strength of the pound as well as growth forecasts to provide directional impetus. Resistance seen at $1.5690/00, more into $1.5810 with stops above. Bids $1.5650, $1.5630/20.
EasyForexNews Research Team