On Tuesday (Oct 11), / slowly recovered to trade at 1.1062, up 0.04%.
The market for pension funds came close to collapse after the UK government’s “mini-budget” triggered wild swings in financial markets that sent them to new recent lows.
But the latest move did little to assuage market concerns, with the pound falling 0.32% and long-term gilts extending losses in European trading on Monday, with the 30-year bond yield rising as much as 17 basis points to 4.56%.
“Clearly, the Bank of England is trying to find more targeted ways to support liquidity in LDI funds,” said Antoine Bouvet, senior strategist at ING.
Jon Cunliffe, deputy governor of the Bank of England, said in a letter last week that the institution had no choice but to intervene to prevent fund managers from selling ¡ê50 billion of gilts and triggering a market crash.
On the downside, GBPUSD sees temporary support at 1.1030(Fibonacci 50% retracement of the latest uptrend) ahead of 1.1000(psychological level).
