Cable slips to its lowest level in more than two weeks
The greenback is extending gains against the likes of the pound, euro, swissie and loonie and that is resulting in a drop in cable below the 1.2900 handle. The low so far touches 1.2897. Although the greenback is also gaining elsewhere, the pound is notably weaker and I would expect that to continue as Brexit uncertainty continues to linger as Theresa May heads to Brussels today.
There is also the BOE meeting to look out for and if anything else, I would expect dovish tones to come out from Carney on the economic outlook and on Brexit developments. That said, I’m still holding the view that the BOE will be very much a non-event as they still have their hands tied but if they harp on fears of a no-deal Brexit, it could weigh on the quid considering that the bank rate is only at 0.75%; leaving them with very little room to maneuver if they need to stimulate the economy in such a scenario.
As for cable now, there are bids layered around the 1.2900 handle so that should help with keeping price steady around the figure level for now. But beyond that, further support is only seen closer to 1.2880 with further support then seen closer to 1.2850.