The pair closed in NY Monday at $1.6726 after rate had managed to recover off a session low of $1.6697 to $1.6744, the correction aided by release of better than forecast Citi earnings and stronger US retail sales, both of which allowed equities to recover. Rate drifted off into the close though early demand into Asia allowed rate to mark highs at $1.6730 before it resumed its easing track, the rate moving down to $1.6713 ahead of the European open. Euro-sterling, which had extended its corrective pullback away from Friday’s high of stg0.8310 to stg0.8251 on the back of ECB warnings of an easing in monetary policy if the euro continued to strengthen, closed the Monday at stg0.8262, with rate consolidating between stg0.8261/66 through Asia. UKinflation data the domestic highlight this morning at 0830GMT, most expecting a move to 1.6% y/y from previous 1.7% in the headline CPI. Outside factors then include German ZEW at 0900GMT ahead of US inflation data and Empire State at 1230GMT. Cable support remains at $1.6700/1.6695, a break to open a deeper move to $1.6685/80 ahead of $1.6665/60. Resistance $1.6745/50.
