Sell interest at 1.9600 capped an early Europe half-cent cable rally from 1.9550. Prior selling at the figure kept a lid on the pair yesterday, following model fund-assisted gains. Sterling's subsequent pullback extended through 1.9550 to 1.9540 bids after the 09:30GMT second estimate of UK Q4 GDP.
Although the GDP numbers were left unrevised as expected, there was some disappointment that an upward revision did not occur, re: yesterday's disclosure of a much larger than expected 11.1% rise in UK Q4 business investment. Some topside stops are touted above 1.9605 (downtrend line drawn from last month's 15-year high of 1.9917).
Further topside stops are tipped above 1.9615. Sub-1.9540 support points are noted at 1.9520, 1.9490, 1.9460, and 1.9430. In an interview published in today's Times, BoE MPC member Andrew Sentence agrees with the description that he is a "pragmatic hawk". Sentance, the newest member of the committee, voted for a 25bp UK rate earlier this month (Feb 8), along with Tim Besley (they were outvoted 7-2).
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