Closed in NY Wednesday at $1.5538, after recovering off session lows of $1.5523. Sterling was pressed down on reaction to the BOE’s Inflation Report, though this was seen only confirming what had been in the UK weekend press, inflation overshoot in the forecast horizon, low growth with the QE door seen left open. Cable held around $1.5540 in early Asia as it consolidated yesterday’s move, survived an initial retest of the NY lows before edging to recovery highs of $1.5543. However, this correction proved short lived with rate getting pressed down to $1.5513, but reported demand placed from $1.5515 through to barrier interest at $1.5500 has so far been able to cushion. A break below the figure to expose further stops, though if triggered expected to run into further barrier linked demand ahead of $1.5485. Stops then seen on break of $1.3480. Resistance remains in place between $1.5540/50 ahead of $1.5580/85. Euro-sterling, which had been driven to highs of stg0.8685 post Inflation Report, drew talk that demand was linked to an M&A order in the works (Vodafone/Kabel Deutschland, E6bln), though no confirmation seen. In Asia, the rate consolidated this recovery between stg0.8653-0.86655.
EasyForexNews Research Team