Cable sank to $1.2065 into Tuesday's NY.......>

CABLE: Cable sank to $1.2065 into Tuesday's NY open only to bounce sharply as

Merkel struck a conciliatory tone re: Brexit and noted that the Irish backstop

could be replaced by another "practical arrangement," if it would serve the

purposes of the original solution. Cable surged ~90 pips to $1.2179 on these

headlines, then eased off somewhat and climbed again as the greenback

depreciated across the board. EU Council Pres Tusk poured cold water on the

possibility of renegotiating the backstop clause "until an alternative is found"

and called upon the UK PM to propose "realistic alternatives."

- UK gov't to scale back its involvement with EU politics, ordering diplomats to

withdraw from all EU meetings which do not affect key UK interests. UK requested

Finland, which currently holds rotating EU presidency, to vote on its behalf

during "Brussels boycott" starting Sep 1.

- UK PM Johnson due to meet German & French leaders this week. UK PSNB at

0830GMT. Focus on FOMC Minutes 1800GMT.

- Support $1.2135(38.2% $1.2065-1.2179), $1.2120/10. Resistance $1.2160,

$1.2180, $1.2200.