March 11, 2020 / 8:20 AM / a month ago

Sterling dips against euro after Bank of England emergency rate cut

FILE PHOTO: UK pound coin plunges into water in this illustration picture, October 26, 2017. REUTERS/Dado Ruvic

LONDON (Reuters) - Sterling fell against the euro on Wednesday but stayed steady against the dollar after the Bank of England cut interest rates by 50 basis points to 0.25%, in its first emergency since the global financial crisis more than a decade ago.

The move, which came in response to growing worries about the coronavirus and hours before a new UK government budget plan, pushed the pound down 0.5% to 87.83 pence per euro but up 0.1% against the dollar to 1.2906.

“We saw an immediate reaction” said Jane Foley a senior currency strategist at Rabobank. “The 50 basis point move was on the aggressive side of expectations and it was a bit of a surprise that they went before the budget.”

“But it is in some way reassuring that the BOE say they have been coordinating with the Treasury and the fact that UK authorities have prepared a comprehensive package of measures.”

Reporting by Marc Jones, editing by Joice Alves

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