The pair closed in NY Tuesday at $1.6960, euro-sterling at stg0.7985. The rate slipped to $1.6938 on release of UK CPI data which saw an unexpected drop in the headline number to four year lows of 1.5%. Dip demand pared losses and the recovery extended to $1.6989, US CPI followed and after a much stronger reading it prompted a dollar rally to take the rate to $1.6949. Euro-sterling saw gains capped ahead of stg0.8010 after the soft UK CPI data, before euro-dollar slippage weighed through the afternoon. The Asian session witnessed light volumes and tight range trade amid ongoing geopoliticaluncertainties in Iraq and Ukraine. Cable found early support in tandem with euro-dollar, it climbed 10 pips to $1.6967 before running into fresh selling pressure. Dollar demand emerged to add weight and the pair eased back to sit near session lows. Focus now turns to release of the BOE minutes at 0830GMT where markets will look closely for any hawkish rhetoric. Cable is expected to find support ahead of $1.6850, a break opens $1.6838 (17 Jun low). Euro-sterling stuck in a narrow stg0.7984-90 range lacked direction with initial support seen at stg0.7981 (50% fibo of stg0.7959-0.8003.
