With US markets closed for the Labor Day holiday volumes remained light tied to narrow range trade. Cable initially lifted to $1.6644, however the release of soft UK mfg PMI which showed that activity in the sector had expanded at the slowest pace for 14 months, pared early gains. Losses extended to close the European session on a heavy tone at $1.6605/10. Euro-sterling managed to consolidate above stg0.7900 having recovered off its early low of stg0.7891. Cable opened soft in Asia and slipped to $1.6605 in early dealings as the pair tried to hold above the $1.6600 handle. However, as Japanese/leveraged demand took out the Y104.50 barrier in dollar-yen this prompted a broad dollar rally and it quickly made a show under $1.6600, with losses extending to $1.6578. Support in the dip provided a minor recovery, before fresh supply emerged to re-test the intraday low. Euro-sterling contained within narrow range trade extended the slow grind to stg0.7914, before light profit take sales eased. Traders look towards UK PMI Construction data at 0830GMT for direction.
