Closed in NY at $1.6252 after rate had corrected back from $1.6273 to $1.6233 ahead of the close. Rate continued to squeeze lower into early Asian trade as rate took direction from euro-dollar which in turn was pressured down on early euro-yen sales as a returning Japanese market reacted to the closure of Japanese companies in China due to recent unrest. Cable traded down to retest that NY pullback low at $1.6233, met demand again here before recovering to $1.6257, then drifted off to $1.6240 ahead of the European open. Euro-sterling was contained within a tight range of stg0.8061/71 overnight as rate consolidated its corrective pullback off Friday highs of stg0.8114. UK inflation today’s domestic interest (0830GMT), with BOE Minutes Wednesday lurking in the background. Suggestions that the MPC may be moving away from further expansion in QE seen providing some support for sterling. The pound also has positive events coming into the end of the month with the HSBC dividend as well as end of month fixing of CAP payments (EU payment to UK farmers) moving into view.
EasyForexNews Research Team