Cable rallied to 1.9790 offers in early European trade, as the continent absorbed the 00:01BST disclosure of March's better-than-expected RICS UK house price balance. This rose to +25.5, from +24.8 in February. A fall to +20.0 was expected. The strong number underpins the expectation that the BoE MPC will hike the UK base rate by another 25bp to 5.5% next month (May 10).
Eastern European demand for GBP helped base cable pre-1.9734 (yesterday's post-FOMC minutes NY session low), following its retreat from 1.9790. February's larger-than-expected UK trade deficit contributed to that retreat. Sub-1.9734 support points include 1.9724 (today's Asian session base) and 1.9711 (Wednesday's Asian session floor). Further offers are touted at 1.9800, with some stops tipped above the figure.
Additional sell interest is tipped at 1.9820 a couple of pips above yesterday's eight-day high. US weekly jobless claims, and March import prices, will be unveiled at 12:30GMT. Jobless claims forecast: 320k. Import prices forecast: +0.8% m/m. A two-day G7 meeting begins in Washington tomorrow.
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