Sterling rises, gilts drop after Carney's speech
LONDON Aug 28 (Reuters) - Sterling recovered from a two-week low against the dollar while gilts fell after Bank of England Mark Carney's speech did little to temper expectations the central bank may raise rates earlier than it has flagged.
The short sterling strip <0#FSS:> was broadly unchanged while sterling overnight interbank average rates (SONIA) were still pricing in the risk of a first rate rise from mid-2015 .
Sterling rose to $1.5528 after Carney's comments, up from a two-week low of $1.5427 struck briefly after the BoE chief's comments.
The euro also lost ground to trade at 86 pence after his comments, down from 86.335 before his comments.
UK gilt futures reversed gains to last trade 6 ticks down on the day at 110.21 from 110.70 before Carney's comments.
The FTSE 100 extended losses and was trading down 0.7 percent.
(Reporting by London markets team, editing by Jessica Mortimer)
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