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Pound rises versus dollar as Treasury buyback weighs on USD

GBP/USD was quoted near 1.3610 after the US Dollar Index fell 0.8%, as Treasury activity pushed US yields lower.

Reported · Written up by our desk · Major Pairs

The British pound rose against the US dollar on Wednesday, with GBP/USD trading around 1.3610 after hitting a daily high of 1.3630, the highest level since May 11, according to FXStreet.

FXStreet said the move followed a US Treasury buyback of longer-dated bonds that supported market liquidity, after the US 30-year yield reached its highest level since 2007. The outlet added that the announcement helped pull US yields lower and pushed the US Dollar Index down 0.84% to 98.80, near end of May levels.

FXStreet also linked the recent rise in long-end yields to higher-than-expected inflation expectations, driven by elevated oil prices tied to the lack of resolution in the US, Iran conflict. The piece cited commentary that a large-scale war against Iran remains an option.

Looking ahead, FXStreet said traders were preparing for the Federal Reserve’s last meeting minutes and noted there were three dissenters in the prior meeting, led by Cleveland Fed Beth Hammack, Dallas Fed Lorie Logan, and Minneapolis Fed Neel Kashkari. The outlet added that UK July inflation was mixed, with headline CPI rising to 2.9% and core CPI steady at 2.6% year on year, leaving expectations for a possible Bank of England rate decision in September “nimble.”

Latest closeGBP/USD 1.354 ▲0.3%|Dollar index 99.64 ▼0.3%

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