January 9, 2020 / 10:13 AM / 2 months ago

Pound falls after Carney says BoE could respond promptly to economic weakness

FILE PHOTO: Mark Carney, Governor of the Bank of England, speaks at a Bank of England Financial Stability Report news conference in London, Britain December 16, 2019. Kirsty Wigglesworth/Pool via REUTERS/File Photo

LONDON (Reuters) - Sterling fell to a near two-week low against the U.S. dollar after Bank of England chief Mark Carney said that there could be a “relatively prompt response” from the bank if it looked like weakness in the economy will persist.

Sterling was last down 0.5% at $1.3028, its lowest level since Dec. 27. GBP=D3 Sterling also fell against the euro, down 0.6% at 85.27 pence. EURGBP=D3

British government bond yields fell, with two-year gilt yields last down almost 5 basis points on the day at 0.59% GB2YT=RR. Bond yields move inversely with prices.

Money markets currently price a roughly 60% chance of a 25 basis point interest rate cut by December, versus just over 50% at the end of 2019 BOEWATCH

Reporting by the London Markets Team, writing by Yoruk Bahceli

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