Sterling remains the out-performer in the markets at the moment and the support for Sterling dips continues to highlight the demand for GBP ahead of potential further rate hikes from the BoE. In the short-run dealers eye the US employment report at 13:30 GMT as the key event-risk.
A 150K or there-abouts release will maintain the status-quo into the weekend while and significantly different release will give cable its directional bias. From 1-week highs of 1.9735, recorded last session, the market has placed offers tight above 1.9700 and is currently chasing the bid under 1.9650.
Key support comes in at 1.9620 and then 1.9600-10 and we are hearing of stops under 1.9600. On the options front, a GBP 100Mln 1.9600 strike rolls off at the NY cut at 15:00 GMT while into next week 1.9470 expiries could prop on dips.
In other news: UK PM, Tony Blair, issued a statement today that he will NOT resign while further Sterling supportive M&A news centers on the potential leveraged buy-out of UK Grocer Sainsburys.
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