The pair closed in NY Tuesday at $1.6541, just off session lows of $1.6540, the low seen as the dollar recovered through the NY session. Recent failure to push back above the $1.6600 area seen supporting the recent bearish tone. Cable initially recovered to $1.6548 in opening Asian dealing before rate reversed to press down to $1.6537 as it tracked downside pressure on the euro. Buyers quickly emerged into the dip and bounced rate back up to $1.6560, drifting off to $1.6550 ahead of Europe. Euro-sterling reflected the stronger downside pressure on the euro as rate squeezed to an extended low of stg0.7949, (closed NY at stg0.7960, reversed off early Asian high of stg0.79625). Trader reports over the last couple of weeks have suggested that dollar strength wouldplace downside pressure on cable, but with the BOE looking set to raise rates in 2015, while the ECB is seen on the verge of QE, the move down seen given some buoyancy by an easing euro-sterling. A light UK data calendar with main attention set on dollar strength with outside data influences of Germany/EZ CPI data Thursday/Friday. End of month also looms with rebalance dollar sales expected, though can also expect some cross demand to emerge to counter.
