A bout of profit-taking on long positions is being blamed for cable's drop to intra-day lows circa 1.9750. 10-week highs just shy of 1.9825 were notched in early European trade, as the pound continued to benefit from the risk that another 25bp UK base rate hike to 5.5% might be delivered this Thursday.
Sub-1.9750 demand is noted at 1.9740 and 1.9720/25. The latter orders are located just ahead of 1.9718, last Friday's high. Some sell stops are tipped below 1.9700. Monday's Asian session peak was 1.9698. On the geopolitical front: a slated news conference with Iranian President Ahmadinejad has been postponed until tomorrow (Reuters).
The news conference postponement follows a senior Tehran official's comment that Britain and Iran should be able to end the stand-off over the capture of 15 Royal Navy personnel by negotiating (BBC website).
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