Sell interest from 1.9420 capped cable at an intra-day peak of 1.9422 following its early Europe break through 1.9401 (today's Asian session top). GBP/USD then retreated to lows circa 1.9388 (yesterday's pullback floor from 1.9456) ahead of the 09:30GMT disclosure of November's much higher than expected UK trade deficit.
Further quarter-cent sterling losses ensued on the back of that UK trade deficit blow-out. Demand ahead of 1.9365 based those losses. Stops below 1.9365 were tripped during today's Asian session, en route to a two-day low of 1.9343. Further stops are touted sub-1.9340. The size of November's US trade deficit will be disclosed at 13:30GMT.
Forecast: $60.0bn, from $58.9bn in October. The BoE MPC is expected to keep the UK base rate at 5.0% when it delivers its monthly rate verdict tomorrow, despite a majority of the "Shadow" MPC recommending a hike. A prime US investment house has this week joined hawks tipping a 25bp UK rate rise next month (Feb 8).
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