The pair closed in NY Wednesday at $1.6009 after rate had begun to correct off NY highs of $1.6161 on position adjustment ahead of the FOMC announcement. FOMC statement was seen as more hawkish than market had expected and prompted strong dollar demand across the board which pressed cable to lows of $1.6003, with recovery efforts into the close kept shallow. Weak demand into Asia managed to take rate up to $1.6019 before momentum faded and fresh dollar demand out of Tokyo pressed rate to extended lows of $1.5967. Recovery to $1.5987 was quickly followed by another sell off, this time to session lows of $1.5965, with rate slowly recovering to above $1.5970 ahead of the European open. The overnight downside pressure was seen heavier on euro-dollar allowing euro-sterling to pullback from an early high of stg0.7904 to stg0.7882. Rate trades around stg0.7886 into Europe. Nationwide house price data due at 0700GMT in an otherwise data light domestic diary. Focus will be on further fall out from yesterday’s FOMC announcement, with Germany CPI and EZ sentiment indicators released this morning ahead of US GDP and weekly jobless data early afternoon. Support $1.5965, $1.5950/40. Resistance $1.5986, $1.6020.
