When BOE Broadbent declined to rule...>

EURO-STERLING: When BOE Broadbent declined to rule out negative rates in the UK,

despite the policy rate already sitting at the effective lower bound, it

provided the pressure on sterling to drive the cross up to challenge the topside

of its 1.0% 10-dma envelope, which by time had pushed up to Gbp0.8841. Rate

retains a buoyant feel, the corrective pullback so far holding shallow. However,

if rate fails to make a decent break outside of the envelope it could lead to a

sharp rejection which opens a move back toward its 10-dma (current Gbp0.8754). A

break and clear above to expose the topside of the 2.0% envelope top currently

at Gbp0.8929.

Markets continue to shrug off any longer-term hurdles for the ECB's asset

purchase program, with ECB's Stournaras stating he's confident the ECB will find

a solution, and with Fed speakers today suggesting their opposition to negative

rates, pressure on sterling could gain pace.