Closed in NY at $1.5717 having seen a volatile FOMC reaction, with moves tracking EUR/USD reaction. Rate initially dropped down
to retest the earlier post BOE Minutes lows at $1.5651 before bouncing sharply higher to $1.5755. Rate then eased to $1.5675 before settling between $1.5710/20 into the close. Rate marked overnight highs at $1.5721 into early trade before tracking EUR/USD lower as Asian equity markets showed their disappointment of no announced QE3 by the Fed, followed later by release of weaker than forecast China PMI data. Rate traded to a low of $1.5674, settling between $1.5675/90 into Europe. Rate was last trading around $1.5678. Domestic data has retail sales up for release at 0830GMT, with an improvement from April’s low read widely expected but traders see the prospect of further QE, following the BOE Minutes revelation of the 5-4 split to keep rates/QE unchanged at the last meeting suggesting the MPC edging in that direction, overshadowing. CBI data due at 1000GMT. Cable support seen at $1.5660/50, resistance $1.5720 ahead of $1.5750/55 and $1.5780.
EasyForexNews Research Team