Ldn FX: Euro-Sterling Fix Sell Interest Boosts Pound
LONDON, Jul 27 (MNI) - Decent sized euro-sterling sell interest for the 1000GMT London fix provided the pound with some added lift through European morning trade Friday, the demand for sterling extending the cross' pullback from Thursday's highs of stg0.7860 to stg0.7800, which in turn allowed cable to retest its Thursday highs at $1.5725. Rate is holding firm into early New York.
STERLING SUMMARY: Opened early Europe at $1.5682, stg0.7838 Cable closed in NY at $1.5685, off extended recovery highs of $1.5724 having met stiff resistance from offers placed into the Jul 19 highs at $1.5735. Trade through Asia was contained within a tight $1.5666/93 range, while euro-sterling held within stg0.78265-0.7835. A few traders note that cable has now faltered three times in recent sessions ahead of its 200-dma, today coming in at $1.5745. Attention also on the 200-week moving average at $1.5728 at tonight's close, a break either way having seen decent follow throughs in the past. Euro-sterling's rejection away from stg0.7860 Thursday allowed cable to track euro-dollar's recovery, with talk suggesting European sovereign euro recycling is the reason for the rate easing away from highs. Cable tracked euro-dollar moves into early Europe, edging up before meeting resistance at $1.5700. Rate drifted off to $1.5672 before getting driven higher on reports of LHS euro-sterling interest at 1000GMT. The cross dropped to stg0.7800, taking cable back to retest $1.5725 ahead of the NY open.
UK: Press pick-ups in the UK Friday, * UK PRESS: Ambrose Evans-Pritchard writes in the Telegraph on Friday how the UK "is contracting as fast or even faster than" Spain or Italy. He says regulators "have choked the British banking system even more violently than European regulators have choked the eurozone banking system."
ADVISORY: UK Nationwide house prices due out 0600GMT Aug 1
LOOKING AHEAD: * US data starts at 1200GMT with the Building Permits Revision for June, followed at 1230GMT by second quarter GDP, which is expected to rise 1.4%, compared with the 1.9% rise in the previous quarter. * Most of the key GDP components are expected to weaker than in the previous quarter. The chain price index is expected to increase 1.5% following the 2.0% rise in the previous quarter. Annual revisions will be included with the data. * At 1355GMT, the Michigan Sentiment Index is expected to be unrevised at 72.0 in July. * US Housing Vacancies are due at 1400GMT, while late data sees the 2015GMT release of C&I Loans.
John Webb London bureau (44 207) 862 7497 email@example.com