UK names saw value from the open and squeezed Cable to 1.9640 from 1.9600 and there was also talk of sizeable US bids just under the figure, running down to the 1.9580 Thursday low. Early direction proved to be a slight of hand with the real move of the session waiting in the wings.
EUR/USD had a run for stops under 1.3100 and the resulting drop to 1.3100 helped drag Cable through a mixture of bids and stops at 1.9600. Lows of 1.9557 recorded before small bids emerged. Stops are touted under 1.9540 and 1.9520 with some London accounts seeing near-term risk to 1.9475. Offers are reportedly stacking up from 1.9650 through 1.9680 with topside stops not emerging until 1.9730. M&A activity still an issue but through GBP/JPY only as the Japan Tobacco-Gallahar deal was announced to be a cash only affair.
News that the SFO were dropping the 2-year investigation into BAE's GBP 10 yard Saudi fighter deal also provided a degree of Sterling support but Dollar pep has been the dominant theme through Europe. GBP/USD Support is now at 1.9560 with a minor resistance at 1.9590. Still feel that Stg is building for another significant rally.
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