Cable soared to new 14-year highs just shy of 1.9750 late in the Asian session, after tripping stops above 1.9700. Commercial demand for GBP reportedly spurred the break above 1.9700 (yesterday's peak). Sterling continued to threaten 1.9750 in early European trade, with option-related selling re: a 1.9750 exotic barrier helping prevent a break of the level.
A bout of profit-take selling then depressed the rate through 1.9700. Fresh downward momentum to an intra-day low of 1.9637 was fuelled by the 09:30GMT disclosure that November's UK manufacturing sector PMI fell to an eight-month low of 52.6, from a downwardly revised 53.5 in October. A half-cent recovery rally ensued (1.9688 was the Asia top, pre-06:20GMT). Today's key US event risk is the 15:00GMT unveiling of November's ISM manufacturing index.
Another sub-50.0 number as per yesterday's Chicago PMI index, could spur fresh USD selling. A rise to 52.0, from 51.2, is expected. Touted bull targets north of 1.9750 include 1.9795, 1.9825, 1.9900, 2.0000, and 2.0100 (Sep 1992 high, pre-Black Wednesday).
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