The pair closed in NY Tuesday at $1.7131 after rate recovered off its UK IP/Mfg react lows of $1.7085 to $1.7135, settling around $1.7130 into the close. The recovery was aided by an easing in UST yields which pressured the dollar across the board. Cable remained in a tight range around $1.7130 in early Asia before it lifted to $1.7143 as risk was given a boost on release of strong Australian WestPac confidence data. However, move proved short lived as release of slightly softer than expected Chinese data countered and cable slipped to $1.7127. Dip met willing buyers and rate edged back to $1.7130/35 ahead of the European open. Euro-sterling, which had extended its recent recovery to stg0.79565 on UK data, consolidated between stg0.7945-48 in Asia. Sterling remains in favour, Tuesday’s data, though headline disappointed, was seen strong on a Q/Q basis. Trader reports suggest buying cable dips to $1.7080, whilstfading euro-sterling rallies above stg0.7950. One report, however, suggests a deeper correction could be seen ($1.6950) before we see a stronger recovery toward $1.7350. BOE MPC Shafik to be quizzed by the Commons Select Committee at 1315GMT, though FOMC Minutes at 1800GMT overshadows.
