Closed in NY Thursday at $1.6277 after rate had pulled back from a recovery high of $1.6294 and edging back from a pullback low of $1.6254. Rate extended recovery into early Asia to $1.6285 before drifting to $1.6274 as it tracked euro-dollar moves. Announcement that the vote on the Fiscal Cliff Plan B had been pulled, highlighting the divisions in the Republican ranks, acted to weigh heavily on risk, taking rate to a session low of $1.6241, but managed to hold off retesting Thursday lows of $1.6238. Recovery off lows extended to $1.6256 ahead of the European open. Sterling proved more resilient to the risk off move, which in turn allowed euro-sterling to extend its corrective pullback off Thursday highs at stg0.8161 to stg0.8116 in Asia. Rate opens Europe around stg0.8128. UK final reading of Q3 GDP and borrowing data the domestic interest this morning at 0930GMT, though Fiscal Cliff negotiations will again overshadow. Thin conditions into year make for volatile conditions, with underlying demand for cable seen remaining in place.
EasyForexNews Research Team