The pair closed Monday’s US/Canada holiday thinned session at $1.6713 after rate had slowly pared earlier Asian gains to $1.6823 to $1.6694 through a subdued trading day. However, the rate closing above key support at $1.6670/65 was seen keeping the recent underlying buoyant tone in place. Cable initially extended the recovery to $1.6724 in early Asian dealing, dipping back to mark overnight lows at $1.6710 as markets were knocked lower on release of RBA Minutes (Aussie traded lower) before finding renewed demand interest. This recovery was given added legs by the BOJ decision (to double scale of unlimited loan program) which provided a boost to the Nikkei, aiding risk which pressed on the yen. Cable pushed to an overnight high of $1.6736 before settling into a$1.6722/34 range through to the European open. Attention turns to UK inflation data at 0930GMT (CPI, PPI, RPI), with UK employment data and BOE Minutes Wednesday and retail sales Friday, for next directional impetus, though market still eyeing possible sterling demand to emerge from the Verizon-Vodafone deal (possibly Feb20 for value Feb24) which many say has been providing a good part of sterling’s recent gains.
