Sterling boosted Tuesday by raised hopes......>

CABLE: Sterling boosted Tuesday by raised hopes for some kind of Brexit

deal(some noted a shift in the EU stance during G7), along with the agreement of

mainly opposition MP's to try and stop a no-deal Brexit. Cable managed to push

up to $1.2310, while EUR/GBP broke down to Gbp0.9016, extending further its

corrective pullback from recent high of Gbp0.9324(Aug12). However, the move

above $1.23 prompted fresh sell interest to emerge which dropped rate back to

$1.2252. Buyers quickly emerged into the corrective dip, took rate back to

$1.2304 before it settled around $1.2290 into the close. Asia extended the

pullback to $1.2268, with recovery efforts topping out at $1.2287. Rate

currently trades around $1.2280.

- With Brexit no-deal already seen in the rate sterling shorts look exposed,

though for cable a move above $1.2380 seen needed to put rate into any major

corrective rally. EUR/GBP trading on the base of its 1.0% 10-dma envelope, the

10-dma remaining in a downtrend which should support sterling generally. Main

counter to the current recovery is potential for opposition Labour Corbyn to

become a stand-in PM.