The pair closed in NY Tuesday at $1.7144 after rate had been pushed to extended 68-mth highs of $1.7192 following the release of stronger than forecast UK inflation data. Failure to push on toward $1.7200 prompted short term spec to cover back, with downside momentum given an added shove into the NY session as analysts read slight hawkishness into Fed Yellen comments suggesting that the Fed funds rate may rise sooner than anticipated if US employment continued its surprising improvement. Cable eased to $1.7138 though move was met by decent demand into the dip which cushioned, leaving euro-sterling to extend its corrective pullback from Monday’s high of stg0.7981, through the recent low of stg0.7915, to a fresh 21-mth low of stg0.7911. Cable edged back to $1.7144 into the close, extending this move to $1.7145 in earlyAsia before it continued its slow corrective descent to $1.7133, with rate holding just off this low ahead of the European open. Euro-sterling consolidated within stg0.7914-18. UK employment data provides domestic data interest at 0830GMT (median jobless claims -27k), with the second part of Fed Yellen’s Testimony due at 1400GMT. Cable demand $1.7130/25, resistance $1.7160.
