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King Dollar pounds the King’s currency

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4 October 2022

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King Dollar pounds the King’s currency

Currency moves

Asian share markets rose on Thursday after Britain’s central bank launched an emergency bond buying programme to stabilise a furious sell-off in gilts, though trade was skittish and sterling remained under pressure. The Bank of England said it will buy as much as £5 billion ($5.4 billion) a day of long-dated government bonds until Oct. 14. It spent about a billion pounds on Wednesday and 30-year gilt yields GB30YT=RR fell 105 basis points (bps), the biggest drop ever according to Refinitiv records stretching back to 1992. The move buoyed sterling GBP=D3 and offered some salve to a fractious mood in markets, but by mid afternoon in Tokyo the pound was struggling for support and down 1% at $1.0776. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.5% – more muted than a 2% surge on Wall Street overnight. Japan’s Nikkei .N225 rose 0.9%.

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