British pound drops 2.8% against dollar
The British pound continued to fall into Friday afternoon, dropping as much as 2.8% against the dollar.
It was trading at $1.0941 at 3:45 p.m. in London, as analysts said the prospect of reaching dollar parity was certainly on the table.
Investors appear to have been “spooked” by the huge program of tax cuts announced by the British government coming at a time of much higher spending on an energy price support package and rising interest rates.
— Jenni Reid
Short-term German bond yields hit 14-year high
The two-year yield on German government bonds hit 2.0009%, its highest level since December 2008.
It followed a lower euro zone Purchasing Managers’ Index reading, which led to renewed recession warnings, and the announcement of a program of tax cuts in the U.K., which triggered a sell-off in U.K. government bonds.
The German 10-year bond yield topped 2% for the first time since December 2011….
