The pair closed in NY Monday at $1.5649 after rate had recovered off an early Europe extended low of $1.5541 to $1.5679 with move initially driven by downside pressure on euro-sterling before softer UST yields acted to press the dollar generally lower through the US session. Rate had pulled back to $1.5644 ahead of the close with the recovery extending in early Asia to $1.5661. However, this early demand quickly faded as the dollar was given a boost on the back of a released article from WSJ Hilsenrath suggesting the Fed is ‘seriously considering dropping’ the ‘considerable time’ phrase from its Dec17 policy statement. Cable initially eased off to $1.5637, extending the move to an eventual overnight low of $1.5626(38.2% $1.5541-1.5679) as markets reacted to yen strength, driven by sales of EUR-JPY, AUD-JPY and NZD-JPY, with GBP-JPY easing off to Y187.80 from earlier session highs of Y189.20. Short covering ahead of the European open allowed cable to recover to $1.5646. Attention in Europe turns to the release of UK IP/Mfg data at 0930GMT (medians 0.2%mm/0.2%mm). Cable resistance seen at the Asia high of $1.5661, a break of $1.5665 to expose Monday’s high at $1.5679, with offers seen into $1.5680.
