LONDON: Sterling rose while UK gilts extended losses on Thursday after the Bank of England left borrowing costs at 0.5 percent and its quantitative easing target unchanged, and after China unexpectedly cut rates.
The BoE decision was in line with the market consensus but some market players had seen a risk that the BoE could opt to extend asset purchases.
Sterling rose to a one-week high against the dollar of $1.5561, rising in line with other riskier assets after the surprise news from China, which came at the same time as the BoE decision.
The pound also rose against the euro, which dropped to a session low of 80.855 pence from around 81.20 pence beforehand.
By 1102 GMT, the September gilt future was 33 ticks down at 119.35, having traded 12 ticks lower at 119.56 before the decision. The contract hit a session low of 119.03 immediately after the decision.
In the cash market, the yield on ten-year gilts rose 2 basis points to 1.688 percent, having stood flat at 1.664 percent beforehand.
Comments
Comments are closed for this article.