The pair closed in NY Monday at $1.6747 after rate had recovered off a post London fix low of $1.6730 before settling around $1.6750 into the close. Trade through Asia was confined to a $1.6741-51 range. Euro-sterling, which had seen lows Monday of stg0.8115, following release of soft Germany states’/national inflation data, found recovery efforts capped around stg0.8130 before it settled around stg0.8120 into the close. Through Asia the rate was contained within stg0.8119-0.81235. UK Nationwide house price data at 0600GMT and UK construction PMI data at 0830GMT provide the domestic data interest, though these overshadowed by key EZ flash inflation data (0900GMT), in focus ahead of Thursday’s ECB rate/monpol announcement. Traders widely expect the ECB to cut rates between 10/15bps (seen priced in) with added liquidity provision the unknown quantity. With the ECB looking set to take this action, and the UK looking more to timing of next rate hike, short euro-sterling is the favouredposition. Support in the cross remains at stg0.8115, a break to open a deeper move toward stg0.8100 ahead of key support between stg0.8080-50. Resistance stg0.8150-70. Cable support $1.6700-690, resistance $1.6779 (50-dma).
