The pair closed in NY Tuesday at $1.6827 after rate had extended lows to $1.6819 in late NY trade but struggled to build on the move. The recovery extended into Asia from an early low of $1.6825, the rate pushing up to $1.6861 and holding firm ahead of the European open. Positioning ahead of today’s key releases, namely UK employment report at 0830GMT, then the more important BOE Quarterly Inflation Report. Growth forecasts are expected to be moved higher but market will be watching the inflation forecasts for signals to the timing of a BOE rate hike. Recent comment has suggested that this report could see the timing move in to Q1 2015 and has provided the pound with buoyancy, especially vs the euro, but a downward revision to the inflation profile could disappoint. Cable resistance seen into $1.6865, ahead of $1.6880/85 and $1.6900. Support remains around the $1.6820 level, a clear break here to open a deeper move toward $1.6800 ahead of $1.6785/75. Euro-sterling retains a heavy tone, based on the divergence in rate outlook between the ECB and the BOE. Trade through Asia was contained within a range of stg0.8136/45 as it consolidated Tuesday’s extended move to lows of stg0.8135
