The pair closed in NY at $1.5983 after rate had pulled back from a session high of $1.6018 (50% $1.6122-1.5914) to a low of $1.5979 as the dollar recouped earlier losses on optimism that the two sides in the US debt ceiling impasse were getting close to a deal. Cable jumped back to $1.5990 in opening Asian trade before turning lower, a returning Tokyo market noted showing good demand for dollar-yen from importers into the fix, which punched cable to a low of $1.5950 before stronger demand emerged to cushion. Rate recovered through the balance of the session, aided in part by a strong recovery in the Aussie-dollar, which in turn had reacted to RBA Minutes (no cut soon), with rate pushing to a high of $1.5998. Rate was holding just off those recovery highs into early Europe. UK inflation at 0830GMT provides the domestic data interest and could trigger some activity on release. However, bigger moves more likely to come fromWednesday’s employment data release, with its link to BOE forward guidance. Anycomment from the US on debt talks progress also to be in focus. Cable offers seen into $1.6000 ($1.6002 76.4% $1.6018-1.5950) with stronger interest remaining into $1.6020. Support $1.5950/40, $1.5925/20.
