Cable loses ground after soft wage data but it's all about the BOE
Cable down to 1.3257 from a high of 1.3329
Inflation data gives, and wage data takes away. But the Bank of England decides.
The pound was the big story in foreign exchange yesterday after strong CPI numbers convinced the market that a hike in December was about a 44% probability.
Today's wage data led to sober second thoughts; at least after taking some time to let it sink in. The slide lower has been less-aggressive than the climb.
That's a pretty good sign that the market wants to believe in cable -- or at least wants to sell the US dollar.
The interesting level to watch is 1.3167. That's the August high. If cable can't get back above it in the day ahead, then the Brexit bears could start selling again.
That said, this one looks like it wants to run and the spec market is net short, so it's a nice setup, despite the wage miss. The real kicker will be when we hear from the BOE tomorrow. Any signs of hawkishness and it will be a quick move to 1.35 on the way to 1.40.