The pair closed in NY Tuesday at $1.6985 after rate had been pressed to session lows of $1.6966 (post London fix), the move lower extending the negative reaction to comments earlier from the BOE MPC’s testimony to the TSC which pushed back the timing of a rate hike. Rate managed to recover to $1.6990 late session ahead of the close. Cable managed to post an early high of $1.6988 in Asian trade before easing off to $1.6972 before settling between $1.6975/80 ahead of the European open. Euro-sterling, which had traded up to stg0.8025 Tuesday on the mentioned comments, consolidated the move back above stg0.8000 between stg0.8009/15 in Asia. Market has been seen sitting long of sterling (following recent hawkish rhetoric) with traders noting that macro accounts have been paring back these positions over the last week (profit taking). However, while cable can hold above $1.6960/50 seen keeping theunderlying outlook buoyant, tech traders suggest, with $1.6920 (Jun18 low) underpinning. Resistance $1.7000/15. Euro-sterling offers stg0.8025/30 ahead ofstg0.8060/65. Support stg0.8000. UK CBI sales data at 1000GMT and BOE Habgood at TSC appointment hearing at 1345GMT provides domestic interest.
