The British pound depreciated sharply vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9990 level and was capped around the $2.0230 level. Bank of England announced an fine-tine open market operation design to reduce short-term money market rates. BoE executed a ₤5 billion three-day repo that was oversubscribed five times and there is a growing belief among traders that the central bank may be forced to enact additional extraordinary measures. This action evidences the U.K.’s vulnerability to dislocations in the credit markets and many traders believe the BoE will continue to lower rates in the next two months. Data released in the U.K. today saw London like-for-like retail sales up 10.5% y/y in February. Cable bids are cited around the US$ 1.9910 level. The euro gained ground vis-à-vis the British pound as the single currency tested offers around the ₤0.7910 level and was supported around the ₤0.7765 level.