The pair closed in NY Friday at $1.5869 after rate had recovered off an initial NFP react low of $1.5791 to $1.5887, then drifted off into the close. Rate dipped in early Asia, marked lows at $1.5871 before it picked up fresh demand which took it up to $1.5913. This rise was also aided by PBOC surprise low fix for the yuan which prompted a general dollar sell off. As the upside momentum faded so rate eased off to $1.5891 but picked up fresh demand ahead of the European open which has taken it through the Asian high and on to $1.5916 at writing. Euro-sterling was confined to a stg0.7845/59 range in Asia, but rate also reflects the stronger tone in the pound in early Europe as it extends the base to stg0.7842. Focus this week will be on Wednesday’s employment report and the BOE Inflation Report. Traders will focus on the latter to gauge their speculated timing for a UK rate hike. Trader reports continue to favour fading cable rallies though still favour an eventual break of stg0.7800 ineuro-sterling to expose recent lows at stg0.77665 and the 2012 low of stg0.7756. Dollar moves will continue to drive, though with the US holiday Tuesday expect fairly subdued Monday trade.
