Sell interest at 1.9880 kept a lid on cable following its early Europe break through the peak of today's 1.9833-1.9861 Asian session range. Further offers are touted ahead of 1.9900, with some buy stops pegged above 1.9900. Yesterday's high was 1.9890. Wednesday's peak was 1.9895. Helping underpin the pound is the expectation that the UK base rate will be raised to 5.75% this summer.
The consensus forecast is that this increase will come in August but a June or July hike cannot be discounted. There is a 30% chance of the base rate hitting 6.0% this year, according to a Reuters poll. UK Q1 annualized GDP has been upwardly revised to 2.9%, from 2.8%. The annualized GDP deflator has also shot up to a 3-year+ high of 3.2%.
MPC member Sentance says the BoE wants to make sure that signs of increased confidence among UK companies to increase prices does not feed through into a broader continued rise in UK inflation (Newcastle Journal/Reuters). US April existing home sales will be disclosed at 14:00GMT. Forecast: 6.13 million, from 6.12 million in March.
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