GBP/USD closed Monday’s session at $1.5325, having traded through the US holiday within a range of $1.5284/1.5330. Rate initially dipped to $1.5312 into Asia, the rate taking early direction from EUR/USD, reacting to the downgrading of EFSF by S&P. The early easing reversed on the release of better than expected Chinese GDP data, with EUR/USD leading the recovery and taking rate to a high of $1.5371. EUR/GBP pushed up from stg0.8262 to stg0.8292 which provided a counter to cable upside progress, though this rate was holding firm into Europe, able to extend the recovery to $1.5376. EUR/USD extended its recovery but GBP saw headwind sales linked to a M&A deal via GBP/SEK which allowed the cross to move above stg0.83 to stg0.8306. UK inflation data had little effect. Release of strong Germany ZEW data boosted the EUR, taking the cross on to stg0.8319, but this move was reversed as GBP positive sterling-yen M&A related demand.
EasyForexNews Research Team