The pair closed Monday’s NY session at $1.6387 after rate had been pressed lower through the earlier part of the day from an Asian high of $1.6508 ($1.6518 high post NFP Friday) to $1.6347 in early NY. The move lower was seen prompted by cable’s struggle to gain traction above $1.6500 as well as Friday’s NFP also seen pushing back on the timing of any UK rate hike, in tandem with speculation over the Fed’s tapering. Market had also been seen sitting long sterling with move seen as a healthy correction. Cable recovered to $1.6396 during the NY afternoon before easing off into the close. Rate consolidated between $1.6383/91 in early Asia before it managed to edge up to $1.6399 into Tokyo lunch. Rate then dropped back to mark lows of $1.6379 into the Asian afternoon before it settled around $1.6390 ahead of Europe. UK inflation datadue at 0930GMT and will be in focus, most see the y/y number to remain unchanged at 2.1% though others comment that last year’s increase in energy prices could feed through to raise that to 2.2%. Cable demand seen placed from around $1.6350 with stronger interest noted at $1.6335/30 ahead of $1.6310/00. Resistance $1.6400/10, a break to open a move on toward $1.6425/30 ahead of $1.6450.
