The pair closed in NY Thursday at $1.7026 after rate had seen highs of $1.7040 following the positive reaction to the release of BOE FPC (seen with a softer house price buffer than had been expected) and accompanying BOE Carney comments, reiterating that house prices in themselves would not divert monetary policy path. This boost to sterling took euro-sterling below stg0.8000, the move extending to lows of stg0.7982. Sterling pared back some of these gains into the London fix, cable dipped back to $1.6996, the cross rose to stg0.8002, but sterling picked up fresh demand through the US afternoon which allowed cable to nudge back to $1.7030, the cross closing the day at stg0.7992. Early trade in Asia was contained between $1.7021/30 before rate picked up fresh demand which lifted it to $1.7052(Jun23 high $1.7051). Move was seen tracking euro-dollar action as the cross was contained by stg0.7993/97. Cable settled around $1.7040 ahead of Europe. UK GfK showed its first positive overnight since Mar’05, coming in at 1. Domestic focus on UK Q1 GDP final read (0830GMT). Cable resistance from above $1.7050 through to recent highs at $1.7061-64. Support $1.7020-00. End month looms and cable demand expected at fixes (sorry, ‘timed orders’).
