The pair closed in NY Monday at $1.6550, euro-sterling at stg0.8390. After failing to consolidate above $1.6500 during a subdued European session, risk appetite returned as the pair spiked to $1.6537. The move was seen in tandem with euro-dollar which squeezed out euro shorts on a break of $1.3800, triggered stops through $1.3850 on to eventual highs of $1.3876. Real money sold the cable spike and the pair immediately retraced gains to settle around the $1.6500 level. Euro-sterling spiked to stg0.8391 on the move, the cross consolidated gains before stalling ahead of strong offers on approach to stg0.8400. Traders reported of light volumes overnight as FX currency pairsremained tied to narrow ranges. Cable initially made a show above $1.6500 on broad based dollar weakness, however failure to hold prompted a fresh round of sales and the rate settled near session lows of $1.6490. Euro-sterling remained in consolidation mode stuck in the middle of a stg0.8384-91 range. Traders will eye a move towards the topside, capped by strong offers ahead of stg0.8400. Focus turns towards UK CPI data at 0930GMT, expectations are for the rate to fall from 1.9% to 1.7% due to lower fuel and food costs.
