Ldn FX: Asian Sovereign Supply Limits Cable Recovery Market News International
LONDON, Apr. 22 (MNI) - Asian sovereign supply in cable tempered cable's early recovery extension, the rate posting early highs at $1.5476 before slowly easing back through the morning session.
Euro-dollar slippage, on further Greece debt concerns, added further weight to the corrective pullback, as euro-sterling met strong demand interest placed ahead of a reported option barrier at stg0.8650. Cable held around $1.5400 ahead of the New York open, while euro-sterling retained a heavy tone, holding just off traded lows at stg0.8657.
STERLING SUMMARY: Opened early Europe at $1.5430, stg0.8677
as early traders probed for stops above the NY recovery high at $1.5426. Rate slipped to $1.5400 on cross-yen sales, but strong underlying demand interest for sterling via straight cable (ongoing dividend linked demand/M&A Deutsche Bahn confirming takeover of UK Arriva for stg1.585bln in cash), as well as pressure on euro-sterling with the UK currency expected to be a major beneficiary of euro woes. HSBC and GS have recently put out sell recs for the cross and seen adding weight. Cable recovered through the Asian session, pushing above Monday's high at $1.5435 and on to pressure the key $1.5445/50 area into early Europe. Area held on first challenge, giving way on the second with triggered stops through $1.5455 taking it to $1.5476. Asian sovereign sell interest thereafter countered the demand and eased rate back to $1.5430 ahead of UK data. Weak headline retail sales dropped rate to $1.5410, snapping back to $1.5455 on the February revision before again meeting Asian sovereign supply. Rate was pulled below $1.5400 on euro-dollar slippage, while euro-sterling met strong demand interest placed ahead of a barrier at stg0.8650. Stops under $1.5380 were triggered, but dip quickly attracted fresh demand.
