Cable rallied by half-a-cent to fresh six-week highs circa 1.9725 after the 09:30GMT disclosure of February's much better-than-expected UK retail sales. These came in +1.4% m/m, +4.9% y/y, against forecast increases of 0.6% m/m, 3.8% y/y. January UK retail sales were also upwardly revised.
February's very strong UK retail sales increase the risk of the BoE MPC hiking the UK base rate by another 25bp to 5.5% as early as next month (Apr 5). Further good news for UK rate hawks came with the 11:00GMT unveiling of March's CBI manufacturing orders book balance. This rose to a 12-year high of +8, from +4 in February. A decline to +2 was expected. Touted offers at 1.9740 and 1.9750 represent bull targets north of 1.9725.
Noted upper obstacles include 1.9760, 1.9800, 1.9850 and 1.9900. Support points include 1.9694 (yesterday's high), 1.9665, 1.9650, 1.9620, and 1.9600. US weekly jobless claims are due at 12:30GMT. Forecast: 323k. Bernanke is slated to speak about credit issues at 13:20GMT. US February leading indicators are due at 14:00GMT. Forecast: minus 0.4%.
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