Closed in NY Tuesday at $1.5426 after rate had been pressed to extended 7-mth lows of $1.5415, with euro-sterling, seen as the main driving force on general demand for the euro, driving back up from lows at stg0.8601 to stg0.8685. The cross closed in NY at stg0.8678. Cable marked overnight lows at $1.5420 before clawing its way up to $1.5452 as rate trailed euro-dollar’s extended rally, with euro-sterling able to touch stg0.8700 before backing off. The cross eased off to stg0.8680 before edging back above stg0.8690 into Europe. Cable eased off its highs before settling around $1.5440 ahead of Europe. Traders noted sovereign demand into Tuesday’s pullback, eventually providing cushioning ahead of the next option barrier level at $1.5400. BOE Minutes at 0930GMT, along with UK employment data, provides the domestic interest this morning. Following last week’s Inflation Report most expect no surprises from today’s Minutes release, voting for unchanged rates to be 9-0, with Miles the only one to vote for increased QE. Traders noted that S&P made no announcement on the UK rating, as had been rumoured for after Tuesday’s close, and was seen providing some added buoyancy.
EasyForexNews Research Team