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Sterling Steadier at Lower Levels

Posted:02/12/2008 8:59 by Oliver Scott
Sterling has steadied at lower levels after Monday's sharp sell-off which saw the unit record $1.4804 lows and EUR-GBP move up to 0.8527 highs. A broad reduction in risk was an influence on price action, but the bulk of the sell-off came from proprietary accounts and fund names establishing short positions ahead of Thursday's BoE rate decision. The market consensus is for another 100 bp cut after a run of weaker U.K. economic data and broadly entrenched negative sentiment. Intra-day price action will be influenced by bid interest via Cable towards the 1.4830-50 area and ahead of 1.4800, where a modest size expiry is noted today. On the topside there are offers at 1.4940-50, with stops above 1.4950. In the very near-term Cable may find some support from recent shorts looking to book profits, but the overall tone remains bearish, with 1.4700 a potential target and then the previous 1.4555 low. click here to return to the top of the page
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