BoE Overnight Repo Gains Interest, Sterling Consolidates
Increased demand for BoE overnight dollar offering but bid spread remains wide. BoE's USD 40B overnight repo offer was covered 0.75 times with the lowest acceptable bid rate of just 0.01% and a weighted average rate of accepted bids of 1.641%. USD 30.101B were hence allocated. Today's auction compares to yesterday's USD 40B offering which was covered 0.65 times with a weighted average rate of accepted bids of 2.056% and the lowest acceptable bid rate of 0.01%. The continued wide bid spread hence suggests that financial institutions might be placing "cheeky bids" but allocated volumes still increased. In Thursday's initial auction, the bid to cover ratio was a mere 0.35 times. Meanwhile, the pound-dollar (GBPUSD) continued to retrace yesterday's gains during the overnight session to hold near 1.8500.