The pair closed in NY Thursday at $1.6653 having recovered off a late move down to $1.6625 after rate had failed in its earlier attempt to recover back above $1.6700 (the move up seen as a reaction to BOE Weale comments on the possible timing of a UK rate hike). Rate initially dipped to $1.6650 before picking up fresh demand, the rate able to step its way to an overnight high of $1.6666 before turning lower, easing through the balance of the day before meeting support at $1.6637. Rate was trading around $1.6645 ahead of the European open. Euro-sterling was contained within a stg0.8234/44 range overnight. Focus today turns to UK retail sales and public borrowing data at 0930GMT for the next directional impetus. Sterling crosses have attracted adecent amount of demand interest, technical traders highlighting bull flag in sterling-yen as well as recommendations for long sterling-Sek with shorting into euro-sterling rallies remaining a favoured vehicle for long sterling positions. Talk of RHS fix interest at the 1600GMT fix has done the rounds though some now believe market may be disappointed by the effect. Decent sized $1.6600/$1.6650 strike expiries at the NY cut expected to exert some influence into maturity.
