Traders positioned for month-end dollar supply on Friday as cable lifted to session highs of $1.6613 ahead of the 4pm London fix. The move met post fixing sales which intensified to take out the $1.3150 barrier in euro-dollar. Cable was dragged to $1.6562 before it spiked back above $1.6600 around the NY close which left traders scratching their heads on the move. The late spike pressed euro-sterling to extended session lows of stg0.7913. Cable gapped to $1.6590 in early Wellington trade, the pair continued heavy and ground slowly to $1.6586 before dip demand emerged to cushion falls. As traders reported of light/thinned volumes ahead of the US Labor Day holiday cable wasunable to reclaim a move back above $1.6600 and remained tied to a narrow 10 pip range. The euro continued under broad selling pressure and the cross extended slippage from an opening stg0.7919 to stg0.7905. Demand is seen placed at stg0.7900, a break opens stg0.7889 (24 Jul low). The August PMI’s come into focus this week with Manufacturing due for release on Monday, Construction on Tuesday, Services and Composite on Wednesday, followed by the BOE interest rate decision on Thursday
