Range:1.6386 – 1.6446
There is no stopping sterling at the moment as we approach a May high of 1.6518. It seems even with negative economic news and the reluctance of the MPC to pull the trigger on hiking rates, the pound finds its strength for being the least ugly in the ugly currency contest. Yesterday afternoon, sterling took a shot in the leg as EUR/GBP broke through support levels as European debt woes hit the wires. Next was the demise of the USD taking queens currency higher again. Not much to take from UK data so it will all rely on the EUR and USD to drive this market. Med-term, the question is, will cable really break out of 1.6000-1.6500?
The rollercoaster continues, as they say its looks as bid at the top as it does offered at the bottom! Yesterday afternoon looked like we were going to be testing the 1.4000 support again as comments from Luxembourg’s Junker, who leads the European finance ministers, said the IMF may not release its portion of aid for Greece next month, sent the Euro spiralling. Just as we seemed set to re test 1.4000, the market focused on US yields breaking lower and the possibility that more stimulus could be needed to bolster the faltering US economy in the form of QE3. The market will be looking at the US inflation data along with the Michigan consumer sentiment and pending home sales this afternoon.