Cable has run into resistance pre-1.9950 since pushing its recovery envelope from European morning lows just shy of 1.9890 bids following the 09:30GMT disclosure of April's better-than-expected GfK UK consumer confidence gauge. This came in at minus 6. Minus 8 was forecast.
Touted offers at 1.9970 and 1.9980 are bull targets north of 1.9950. The latter orders have been set three pips ahead of today's Asian session top. Today's nearly 60-pip Asian session drop was attributed to US investment bank selling, allegedly on behalf of a "stressed" hedge fund. Friday's late London plunge to 1.9955, from a session high of 2.0045, was also blamed on heavy USD buying by a US fund. Friday's USD buying accompanied a rumour that a US fund was having to liquidate positions in size due to credit lines being cut back.
The BoE should up the UK base rate by 50bp to 5.75% this quarter, according to NIESR. A 25bp hike to 5.5% is expected next week (May 10). March's US annualized core deflator will be unveiled at 12:30GMT. A fall to 2.1%, from 2.4% in February, is expected.
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