Sterling slides after BoE buys bonds, dollar hits 20-year high



By Sinéad Carew and Alun John

NEW YORK/LONDON, Sept 28 (Reuters) - Sterling tumbled against the dollar on Wednesday before paring some losses after the Bank of England (BOE) said it would step in to prop up the gilt market, and the dollar index touched a fresh 20-year high trading was volatile.

The BOE said it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilise financial markets, and added that it would postpone next week's start of its gilt sale programme.

As markets tried to digest what this meant for the pound, the currency GBP=D3 whipsawed, jumping as high as $1.084 and falling as low as $1.0539. It was last down 0.4% at $1.0695.

"They're really trying to help the structure of the gilt market, more than anything else... The fact that they're effectively doing (quantitative easing) again, while also hiking rates confuses the monetary policy outlook," said Brad Bechtel, global head of FX at Jefferies in New York.

"It also forces the pound to be the outlet valve for the additional expenditures proposed by the government."

Investors were also eyeing the safety of the dollar against a backdrop of political uncertainty after leaks on Nord Stream pipelines between Russia and Europe spewed gas into the Baltic Sea. NATO Secretary-General Jens Stoltenberg attributed the leaks to acts of sabotage.

"Some of it is safety related, given what we saw yesterday with the NordStream and the Russia Ukraine situation," said Bechtel, also referring to the Federal Reserve's aggressive interest rate hiking cycle aimed at taming inflation

"It is the Fed, outperforming in terms of being aggressive and continuing to hike aggressively. The world is realizing that the U.S. is in a better position to handle higher rates whereas other economies are more vulnerable."

The dollar index =USD , which measures the greenback against a group of major currencies, after earlier hitting a fresh 20-year high of 114.78 was last at 114.100.

While initially the dollar's gains were broad-based, the greenback eased in the U.S. trading morning with the euro last up 0.02% at $0.9595 after falling as low as $0.95355.

The dollar was last down 0.22% against Japan's yen at 144.510 after touching a high of 144.860 JPY=EBS .

The Australian dollar AUD=D3 , which is particularly sensitive to swings in investors sentiment was last up 0.420%.

Elsewhere in Asia, the offshore yuan CNH=D3 hit a record low, pressured by expectations of further U.S. rate hikes.



World FX rates Link



Reporting by Sinéad Carew in New York, Rae Wee in Singapore
and Alun John in London ; editing by Richard Pullin, Kim
Coghill, Shri Navaratnam, Gareth Jones and Jonathan Oatis


Mga Kaugnay na Asset


Pinakabagong Balita

Russian rouble slumps to fresh lows vs dollar as tax period ends

B

Japan sets anti-dumping duties on steel wire from China, South Korea


Bank of Korea's Rhee 'not so sure' about digital currencies


Factors to watch on Dec 2

E
U

Tokyo's Nikkei share average closes down 1.59%

J

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.