The pair closed in NY Thursday at $1.6005 after rate had recovered off intraday lows of $1.5950 to a high of $1.6038 through the European afternoon, with rate settling back between $1.5995/10 during the NY afternoon through to the close. Rate touched an early high into opening Asian trade of $1.6008 before it began to drift lower, finding an early base at $1.5987 before edging back toward $1.6000. However, the BOJ announcement of an expansion in its monetary base prompted strong demand for dollar-yen, with this dollar demand then acting to weigh on cable as it was pressed down to $1.5967 ($1.5971 76.4% $1.5950-1.6038). Rate was seen retaining a heavy tone into European trade. A break and clear of the $1.5967 level to expose Thursday’s low at $1.5950. Euro-sterling trade was contained pre BOJ between stg0.7877/85 before the stronger reaction in euro-dollar to the BOJ action allowed rate to press down to stg0.78635. Rate was recovering ahead of Europe, last at stg0.7873. End month flows tend to favour dollar sales, though traders will be wary of European sovereign demand for euro-sterling. EZ inflation data 1000GMT, US PCE 1230GMT then Chicago Report 1345GMT. UofM follows at 1355GMT to provide influence.
