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Yarn--4 50 gm. hanks (88 yds.) Pakucho cotton, color Natural (very white). Available here. (I don't get any benefit from touting this yarn. I just like it.)
Small amount of contrasting yarn, about 20 yds ea. of 2 colors. I used Blue Sky Organic Cotton.
Needles--size 7 or size needed to get gauge.
Gauge: 20 st./4 in, gauge is not crucial.
Cast on a multiple of 5 stitches plus 1. For a finished size of 15" wide by 22" long, allowing for shrinkage when washed, cast on 81 stitches.
Begin with a turned hem, so if you are careful about such things, use a size 7 or 8 needle to cast on, then knit on a 6. You're going to sew or knit this hem down and you want a loose edge to sew or pick up, and you want the back side to be fairly tight so the hem will lay flat. For me, I think, "It's just a towel" and use a long-tail cast on, starting with a size 8, switching right away to a 7. Draw out an extra long piece for your "tail" and you can use it to sew the hem down.
If you are really particular, use a provisional cast on, so that you can knit the loose stitches from the provisional cast on with the live stitches and eliminate sewing the hem. This is really overkill for a towel, but is one way to get a neat hem.
k - knit
p - purl
k2tog - knit two stitches together as one
k3tog - knit three stitches together as one
p1w - purl one, wrapping the yarn loosely twice around the needle, producing a stitch that has two loops around the needle rather than one
sl 1 del - slip one stitch purlwise, dropping the extra loop you wrapped around the needle on the row before, producing a long slipped stitch (lss)
Knit 5 rows in stockinette. If you haven't already, change to a larger needle, the needle you will use for the front of the towel.
Knit 1 row on the wrong size, forming a purl ridge on the right side.
Knit 4 rows in stockinette. Knit a RS row, knitting the cast on or live stitch from provisional cast on together to turn hem, or just sew the hem down later.
Begin border stitch pattern, "Bubble Wrap":
Stitch Pattern Notes: This stitch pattern is from Nicky Epstein's Knitting Over the Edge. It is a great book, and I am indebted to Ms. Epstein for the cute pattern. I've not seen it in any other stitch dictionaries, but am hopeful that it is ok to use it here. Using this stitch pattern will make 15 bubbles, which are actually bobbles with the purl side showing. They are made from one stitch. On wraps, wrap yarn twice, loosely. Be sure to slip stitches with yarn in back. After all bobbles are made, pull the slipped stitches on each side of the bobble to tighten it and loosen the slipped stitch.
Row 1 (WS) With A, p1, *p1w, p2, p1w, p1* repeat 14 times more.
Row 2 (RS) With B, k1, sl1 del, k2, sl 1 del, *[k1, yo, k1, yo, k1] into next st, sl 1 del, k2, sl 1 del* repeat 14 times more, end k1.
Row 3 With B, p1, sl 1, p2, sl 1, *k5, sl 1, p2, sl 1* repeat 14 times more, end p1.
Row 4 With B, k1, sl 1, k2, sl 1 *p5, sl 1, k2, sl 1* repeat 14 times more, end k1.
Row 5 With B, p1, sl 1, p2, sl 1, *k2tog, k3tog, pass k2tog st over k3tog st, sl 1, p2, sl 1* repeat 14 times more, end p1.
Row 6 With A, k1, *drop first lss off needle, sl 2, drop next lss off needle, then with LH needle, pick up first lss, sl 2 sts from RH needle back to LH needle, then pick up second lss with LH needle and k5* repeat 14 times more.
Row 7 With A, purl all stitches.
Row 8 With A, knit all stitches.
Rows 9-16 Repeat rows 1 through 8 once more, changing color B to color C.
Row 17 With A, purl
Row 18-19 With A, knit.
Now you are ready to knit the middle portion of the towel. I used plain stockinette, but you can substitute another stitch pattern if you prefer. If you use stockinette, you need a border to prevent the edges from curling. I've tried garter, but it was too tight lengthwise. I then tried seed stitch, but it was too wide. In the manner of Goldilocks, I'm now trying the border stitch pattern from Arietta. I mean to use it in my next sweater, and need to practice it.
If you like a selvedge edge, use your favorite, such as slipping the first stitch of each row purlwise.
Knit one row, placing two markers, one after the first 10 stitches and one after 71 stitches, before the final 10, then begin edge pattern--
Row 1 (WS) Knit 10 stitches, slip marker, purl 61 stitches, slip marker, knit 10.
Row 2 Knit.
Row 3 same as Row 1.
Row 4 Knit.
Row 5 *p1, k1* 5 times, purl 61 stitches, *k1, p1* 5 times.
Row 6 -7 Knit the knit stitches and purl the purl stitches.
Row 8 Knit.
Continue the edge pattern (or the pattern of your choice) until the entire towel measures 15 inches in length, then begin the border pattern for the opposite end, first knitting a row on the wrong side then knitting 3 rows in stockinette. Repeat Rows 1-19 of the bubble wrap pattern, knit a wrong side row, knit 5 rows in stockinette, using a smaller needle if you like, and bind off and sew the hem. Alternatively, bind off while picking up purl bumps from the towel to attach the hem without sewing.