The pair closed in NY Thursday at $1.6833 after rate saw extended lows of $1.6824 as it reacted to release of stronger than forecast US weekly jobless claims, as well as ECB Draghi opening comments, before recovering to $1.6850. Rate dropped back to $1.6828 post London fix before it slowly edged higher into the close. A slow start in Asia saw rate consolidate between $1.6832/35 before rate was driven down to $1.6802 on risk aversion plays as market reacted to President Obama announcing targeted air strikes in Iraq (Hamas firing two rockets at Israel brings hopes for an extended cease fire to an end). The move down was reportedly given added weight by Swiss name sales as a barrier at $1.6800 moved into view. However, defence of this level allowed rate torecover to $1.6817 but holds back at $1.6808 ahead of the European open. Euro-sterling recovered off its ECB Draghi inspired lows of stg0.7925 to stg0.7940 into Thursday’s close, with the recovery extending on to stg0.7952 in Asia as cable’s pullback outpaced euro-dollar. The cross trades around stg0.7948 into Europe. European reaction to the overnight news could see further risk off trade. UK trade data at 0830GMT.
