Cable slumped by more than a cent to a four-day low of 1.8713 during the London morning, as the USD elicited benefit from speculation that the Fed may be in no hurry to cut the funds rate, re: Fed-watcher Greg Ip's article in today's WSJ. A Thomson Financial survey for the FT was more hawkish still--with more than 40% of the US fund managers polled of the opinion that the Fed will resume hiking within the next six months.
The pound has also been negatively impacted by the announcement from Royal Dutch Shell that it has approached the board of Shell Canada to acquire the 22% it does not yet own in the business for C$7.7bn cash (FT website). A 1.8700 option rolls off at today's 10am EST NY cut, and some demand might emerge into the strike level if GBP/USD extends south. Stops are expected under 1.8700.
Sub-figure bear targets include 1.8680, and 1.8660. Double-day lows just shy of 1.8660 were plumbed last Wednesday and Thursday.Ernst & Young's ITEM Club predicts UK economic growth of 2.6% this year, increasing to 2.9% next year (Sunday Times).
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