The pair closed in NY Friday at $1.5957 after rate had recovered off a late European low of $1.5924 through the NY afternoon to $1.5961. Positioning into the long US weekend, as well as hopes for an end to the US debt ceiling impasse, buoyed risk plays. Rate extended its recovery to $1.5980 in early, holiday thinned, Asian trade before it eased off to $1.5964 as main Asia began (Tokyo, HK and Indonesia closed, Singapore out Tuesday with many trading rooms working half staff). Rate was held between $1.5964/69 in quiet morning trade before fresh demand emerged into the afternoon which lifted it to $1.5989. The rate seen holding firm as market awaits the European open. Offers are seen in place toward $1.6000, the rate having been rejected from $1.6002 Friday as short term players took advantage of the rally to short above the $1.6000 level. Sell interest is seen dotted up to $1.6020. However, sterling could be afavoured long play should the US impasse continue (some see Oct31-Nov1 as thecritical dates). Support remains at $1.5965/60 ahead of $1.5925/20. Euro-sterling was contained by stg0.84845-0.8492 through Asia.
