Cable headed higher from the European open, on the back of good size GBP buying re: a quarterly dividend payment. The size of the dividend payment buying was estimated at up to GBP 2bn. Highs just shy of touted offers at 1.9350 were notched on the back of the above-mentioned GBP demand.
Stops below 1.9350 were tripped on Friday, en route to a six-week low of 1.9264, following the 13:30GMT disclosure of December's above-forecast US NFP number. 1.9260-1.9308 was today's Asian session range. Loss consolidation from last Wednesday's high of 1.9752 is the big-picture sterling story. 1.9225, 1.9180 (Nov 10 high), and 1.9130 (Nov 23 low) are bear targets south of 1.9260. 1.9225 is an approximate 61.8% Fibo retracement point of the ascent from 1.8830 (mid-October lows) to 1.9849 (Dec 1, 14-year high).
A majority of the "Shadow" MPC (5-4) believe the MPC should hike the UK base rate this Thursday (Sunday Times). The MPC is expected to keep it at 5.0%, with next month (Feb 8) tipped as a much more likely 25bp hike date. December's BRC sales monitor is due at 11:00GMT tomorrow.
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