The pair closed in NY Friday at $1.6773, off session lows of $1.6767. Sterling came under pressure through Friday, with strong demand for euro-sterling providing the lead. The cross extended its recovery to just shy of stg0.8000 (NY high stg0.7997), closing the week at stg0.7994. Euro-sterling was marked down to stg0.7986 into the Asia open but buyers quickly edged rate back to stg0.7994 to close the gap before it turned lower again, drifting off to stg0.7985 where it settled through the Asian afternoon. Cable opened Asia around $1.6785 before it backed off to $1.6770, but rate was able to slowly recover through the balance of the overnight session to $1.6784. A light data calendar for today with most attention turned toward Wednesday’s UK Inflation Report(IR) and any indication for the timing of the much anticipated rate hike. One bankreport suggests that the IR should pave the way for hawkish dissenters on the MPC to materialise (RBC). Cable support $1.6770/65 ahead of $1.6750. Resistance $1.6785 ahead of $1.6800. Euro-sterling offers into stg0.8000, bids stg0.7985/80. Technical traders see potential signs that the cross could move higher but most still look to fade rallies.
