The pair closed in NY Monday at $1.6108 after rate had reversed off its early NY recovery high of $1.6186 (from European morning low of $1.6104) to a low of $1.6100 as markets reacted to a SF Fed working paper concluding that ‘the market is factoring in less potential tightening than the Fed may be forced into.’ From an early posted high of $1.6108 into Asia before turning lower again, the rate easing below the NY base to $1.6092 before returning to retest the early high as PBOC surprised markets by fixing the yuan lower than expected which put general pressure on the dollar. However, recovery only provided for better levels to sell and rate was back below $1.6100 as it took the lead from further slippage in euro-dollar which saw cable ease on to $1.6065 ($1.6060 Nov19’13 low). This move lower was also helped by another released Scottishreferendum poll (TNS) which showed the vote to be close and suggesting that the Sunday YouGov poll was possibly not that far off the mark of opinion. Recovery was capped at $1.6080 with rate settling between $1.6070/80 through to the Europe open. UK trade and IP/Mfg data at 0830GMT provides the domestic focus this morning.
