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Sterling falls sharply after BoE Bailey remarks

BY Reuters | ECONOMIC | 10/03/24 03:25 AM EDT

Oct 3 (Reuters) - Sterling fell sharply on Thursday after the Bank of England Governor Andrew Bailey said the central bank could become "a bit more activist" on rate cuts, while simmering tensions in the Middle East kept the dollar supported.

Sterling was last down 0.75% at $1.3169 after hitting its lowest since Sept. 19 at $1.3156, as gilt yields fell and traders upped their bets that the BoE will cut interest rates at least once more this year.

Euro/sterling was up 0.7% at 83.83 pence per euro.

The greenback rose to a one-month peak, as investors scooped up safe-haven assets. Data on Wednesday that showed strength in the U.S. jobs market reinforced bets that the Federal Reserve will not rush to cut interest rates. (Reporting by Stefano Rebaudo, editing by Amanda Cooper)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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