FX round-up: Range bound sterling sees strong demand heading into end of month fix
Sterling moves on Monday were fairly lacklustre for much of the day due to a mixed bag of medium impact news, ahead of what is sure to be a volatile week.
Come 1500 BST and it was all change for the pound which saw strong demand and caught bids against the dollar taking it higher on the day 0.43% to hit a 10-month high of 1.3200 by 1700 BST.
Against the euro, the pound did not fare as well as offers were seen late in the session, pushing the pair 0.12% lower on the day, with an intra-session low of 1.1155.
With the array of news due this week, including manufacturing PMI on Tuesday, construction PMI on Wednesday and the Bank of England (BoE) policy announcement on Thursday, it's fair to say that traders will have much to contend with this week.
No change in policy is expected from the BoE, but Alvin Tan, currency strategist at Societe Generale said "there is a genuine debate in the bank (over raising rates) [...] but we're not expecting any hikes in the next year," adding "there's clear evidence, in our view, that the economy is slowing down, and although inflation is on the high side, momentum seems to have ebbed."
Strong demand was seen in the euro late in the day as London trading drew to a close with EUR/USD catching bids towards 1.1800 by 1630 BST, holding it's ground comfortably at 1.1816, up 0.57% on the day by 1700 BST.
The Japanese yen saw further strength against the dollar on Monday with the downtrend continuing since the 11 July, taking the pair to a day low of 110.39 by 1700 BST, down 0.29%.
Technical traders will note the double top formation on the daily time frame with support at 109.40 which looks to be the direction towards which this pair is headed.