Oct 3 Reuters Sterling was on track on Thursday for its biggest daily fall in almost two years versus the euro and in six months against the dollar as investors shifted to safehaven assets and Bank of England Governor Andrew Bailey hinted at faster policy easing.

The BoE could become a bit more activist on rate cuts if there is further good news on inflation, Bailey said in an interview published on Thursday.

Sterling was last down 1.05 at 1.3128, on course for its biggest daily fall since April.

The pound is seen as a risky currency that tends to rise along with equities.

Eurosterling was up 1.05 at 84.12 pence, in its biggest daily rise since December 2022.

The market is running long GB pound in part based upon the BoE staying on hold whilst those around it continue to cut, said Neil Jones, senior foreignexchange salesperson to financial institutions at TJM Europe.

Bailey39;s comments shift this narrative sufficiently for investors to take chips off the table…, he added.

The safehaven dollar rose to a onemonth peak, as tensions simmered in the Middle East following Iran39;s ballistic missile attack on Israel.

UK 2year gilt yields , sensitive to expectations on BoE policy, dropped 5.5 basis points bps to 3.96.

Interest rate futures showed financial markets see a 98 chance of a 25bp rate cut at the central bank39;s November meeting, up slightly from Wednesday. Markets are pricing in 41 bps of rate cuts by yearend from 36 bps on Wednesday. IRPR

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