The pair recovered off Asian session lows to $1.6497 on Wednesday after it found support from strong UK Services PMI data and improved risk appetite. However, resistance ahead of $1.6500 countered with a quick reversal to $1.6455, and as losses extended into NY it pressed to 6 month lows of $1.6440. Dip demand later recovered to close at $1.6455/60. Euro-sterling saw a strong bounce off post UK PMI lows of stg0.7965, however gains were capped ahead of stg0.8000 to close in NY at stg0.7987. Cable opened flat in Asia and after it initially slipped to $1.6457, dip demand cushioned as traders reported of light volumes across the board. Lacking direction the rate remained tied to a narrow $1.6455-65 range throughout the session as focus turns to today’s BOE rate decision. Although analysts expect no change in policy, markets will have to wait for release of the minutes on Sep 17 to see if there are more than twovotes in favour of a hike. Cable support is seen at $1.6450/45, stronger behind on approach to $1.6420 ($1.6425 – 12 Feb low). Euro-sterling remained in consolidation mode with trade tied to a narrow 5 pip range, strong resistance expected to cap ahead of stg0.8000
