LONDON, March 22 Sterling recovered and
government bond futures fell back on Wednesday, after an
assailant was shot outside the UK parliament by police, loud
bangs were heard and a Reuters photographer saw at least a dozen
British police said they were treating the incident as a
terrorist incident until they knew otherwise.
Sterling had hit the day's lows against the dollar and euro
initially, while bond futures hit the day highs, but both had
reversed those moves by 1537 GMT.
Having fallen to as low as $1.2424, sterling was
trading at $1.2460, down just 0.1 percent on the day, and up
from the $1.2451 level at which it had been trading before news
of the incident broke.
Having also hit the day's low of 87 pence per euro
, sterling recovered to trade at 86.83 pence.
"It's all very unclear at the moment. Obviously there was a
knee-jerk reaction, sterling sold 30 pips lower," said Chris
Hawkes, an FX dealer at ETX Capital.
"It's now trading back up and I think that's basically on
the news that it looks as though the initial threat has been
A parliamentary official earlier said two people had been
shot outside parliament and the building was in lockdown. The
House of Commons session was suspended and members of parliament
who were in the chamber were told to remain there.
Britain’s blue-chip FTSE 100 and mid-caps
share indexes pared earlier losses, last down 0.6 and 0.9
percent on the day respectively. The indexes, with their
majority foreign currency earning constituents, tend to react
positively to weakness in sterling.
British government bond futures also fell back from
the session high struck after news of the incident.
(Reporting by Jemima Kelly, Ritvik Carvalho, David Milliken and
Helen Reid, editing by Nigel Stephenson)