The British pound erased early gains after an unexpected interest rate cut by the Bank of England on Wednesday, while the dollar resumed its descent against the safe-haven Japanese yen and Swiss franc on fears over the spreading coronavirus.

Sterling last traded at $1.2873, almost flat on the day but tumbled from the day's high of $1.2937 after the Bank of England cut its policy rate for the first time since August 2016, by 0.5 percentage point to 0.25%.

The BoE’s move comes as a number of central banks and governments around the world stepped up efforts to shore up their economies from the economic impact of the coronavirus epidemic.

The recovery in safe-haven currencies mirrored falls in U.S. equity futures and U.S. bond yields in Asian trade on Wednesday, as the spread of the virus in major economies threatens to brake business activity and curb consumer spending.

The dollar lost 0.9% to 104.67 yen, down more than a full yen from Tuesday's high of 105.915.

Source : Reuters