Cable is a star this afternoon as the dollar suffers a case of bailout-fatigue. Despite a proposed hike in UK tax rates on upper income taxpayers and comments from deputy governor of the BOE Bean touting the fall in sterling as a vital part of the economic rebalancing process cable is very much in demand. Dealers attribute some of the strength to the rebalancing of the MSCI global equity index and some to the collapse of the BHP Billiton takeover of Rio Tinto (though that was an all-stock deal).
Cable earlier overcame the 38.2% retracement of the slide from 1.6655 at the end of October to the 1.4555 low two-weeks later. The 50% retracement at 1.5605 is next resistance. It trades now at 1.5435.
