Cable has just about retraced all its retail sales-led losses from this morning and is rising rapidly on short-covering as carry trades lead the markets by the nose. Risk aversion spiked after the Chinese rate and currency band moves this morning but it has been ebbing all morning as equity markets took the news in stride.
Strong stocks tend to move hand-in-hand with a weak USD and today is no exception. 1.9777 session highs are within striking distance and stops are poised at 1.9780 and above, dealers say. A break would target the 1.9805 area. Cable trades at 1.9763.
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