AGL 40.02 Increased By ▲ 0.01 (0.02%)
AIRLINK 178.07 Decreased By ▼ -19.78 (-10%)
BOP 9.96 Decreased By ▼ -0.41 (-3.95%)
CNERGY 6.94 Decreased By ▼ -0.19 (-2.66%)
DCL 10.09 Decreased By ▼ -0.52 (-4.9%)
DFML 41.57 Decreased By ▼ -2.25 (-5.13%)
DGKC 106.89 Increased By ▲ 1.22 (1.15%)
FCCL 39.03 Decreased By ▼ -0.57 (-1.44%)
FFBL 81.89 Increased By ▲ 1.64 (2.04%)
FFL 13.70 Decreased By ▼ -0.44 (-3.11%)
HUBC 119.25 Decreased By ▼ -1.31 (-1.09%)
HUMNL 14.00 Decreased By ▼ -0.67 (-4.57%)
KEL 5.91 Decreased By ▼ -0.25 (-4.06%)
KOSM 8.06 Decreased By ▼ -0.20 (-2.42%)
MLCF 48.10 Decreased By ▼ -1.51 (-3.04%)
NBP 72.83 Decreased By ▼ -1.65 (-2.22%)
OGDC 193.76 Decreased By ▼ -3.31 (-1.68%)
PAEL 32.15 Decreased By ▼ -2.95 (-8.4%)
PIBTL 8.02 Decreased By ▼ -0.50 (-5.87%)
PPL 174.07 Decreased By ▼ -2.19 (-1.24%)
PRL 32.60 Decreased By ▼ -0.66 (-1.98%)
PTC 25.27 Decreased By ▼ -0.32 (-1.25%)
SEARL 124.96 Increased By ▲ 3.92 (3.24%)
TELE 9.42 Decreased By ▼ -0.48 (-4.85%)
TOMCL 35.39 Increased By ▲ 0.16 (0.45%)
TPLP 11.62 Decreased By ▼ -1.12 (-8.79%)
TREET 18.42 Decreased By ▼ -0.55 (-2.9%)
TRG 60.49 Increased By ▲ 0.21 (0.35%)
UNITY 38.21 Decreased By ▼ -0.81 (-2.08%)
WTL 1.66 Decreased By ▼ -0.17 (-9.29%)
BR100 11,535 Decreased By -214.8 (-1.83%)
BR30 35,550 Decreased By -621.5 (-1.72%)
KSE100 108,897 Decreased By -1073.7 (-0.98%)
KSE30 33,809 Decreased By -321.9 (-0.94%)

LONDON: Sterling fell more than 1% versus dollar and euro on Tuesday as a steep rise in US Treasury bond yields and fears for the economic impact of a shortage of gas in Britain overshadowed Bank of England comments about a possible interest rate rise.

US yields have surged since last week’s Federal Reserve meeting where it said it may start tapering stimulus as soon as November and flagged interest rate increases could follow sooner than expected.

Tuesday’s remarks from Fed Chair Jerome Powell signalled nervousness about inflation, and pushed US 10-year yields above 1.54% to the highest since mid June and also led markets to price higher future inflation.

“It is all about US Treasuries today as yields climb higher in early trading, placing the whole G10 under pressure,” said Simon Harvey, senior FX market analyst at Monex Europe.

British 10-year gilt yields also rose to the highest since the pandemic started above 1%. But concerns have also grown about how gas and petrol shortages could impact the British economy.

“Concurrent to the rising price concerns is the fact that the UK is also currently facing a fuel distribution issue,” said Jeremy Stretch, Head of G10 FX Strategy at CIBC Capital Markets.

“If the latter (fuel shortage) were to persist that would amplify concerns over the growth profile”.

Some petrol station pumps ran dry in British cities and vendors rationed sales as a post-Brexit shortage of truckers triggered panic buying and raised fears that hospitals would be left without doctors and nurses.

By 1420 GMT the risk-sensitive pound had fallen 1.3% and traded as low as $1.3529, after touching its lowest since mid January. Versus the euro, it slid 1.2% to its lowest since July, at 86.40 pence.

Sterling had jumped last week following the BoE’s hawkish tone on interest rates and its pandemic-era government bond-buying scheme. Governor Andrew Bailey reiterated on Monday that he and other members of the Monetary Policy Committee saw a growing case to raise interest rates. But analysts, including Stretch, said they wouldn’t expect the bank to follow though with a hike any time soon.

Comments

Comments are closed.