Archived IMT (2008.11.06)

Bank of England shocks with a 150-bp rate cut to 3.00% (lowest level since 1950s) against expectations of 50-75-bp cut, making the biggest rate cut since the central bank acquired operation independence 11 years ago. The Swiss National Bank also surprised with a 50-bp rate cut to 1.75%. Sterling collapsed by a full 2 cents in less than 3 minutes to $1.5710 before jumping back by more than 3 cents towards $1.6020, as risk appetite gets a short in the arm. The rate cut is now lifting expectations that the 7.45 am EST decision by the European Central Bank could exceed expectations of a 50-bps cut and deliver a 75-bp cut to 2.250%.