Eastern European demand helped inflate cable to a 15-year high of 1.9857 during the European morning as GBP continued to benefit from the risk that another 25bp UK rate hike to 5.5% might be delivered as early as next month. GBP/JPY also hit a 15-year peak of 241.03 during the European morning.
Fresh guidance as to the probability of a February 8th UK rate hike will be supplied by a slated 19:00GMT speech from BoE Governor King, and tomorrow's 09:30GMT publication of minutes from the January 10/11 MPC meeting. Some GBP/USD stops are tipped above 1.9860. These could further inflate the rate towards 1.9900 if tripped. An exotic option barrier resides at 1.9900. 2.00 is an oft-mentioned bull target above.
2.01 was the September 1992 high. EUR/GBP tripped stops below 0.6545 in Asia today, en route to a 47-month low of 0.6536. Sell interest at 0.6560 has kept a lid on the subsequent recovery rally. GBP/CHF notched a new 64-month top of 2.4758 in Asia today. January's CBI industrial orders balance came in worse-than-expected, but the price expectations index soared.
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