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GBP/USD rises to its best close in three months after Treasury buybacks

Sterling firmed after a US Treasury notice, with Treasury plans to at least double longer-dated liquidity support buybacks from September 9.

Reported · Written up by our desk · Major Pairs

GBP/USD closed Wednesday up 0.53% just above 1.3600, its best close in three months, according to FXStreet. The move came after midday, when a Treasury notice in New York pushed the US dollar lower.

The UK inflation data that opened the session was not the main driver of sterling, FXStreet said. Annual CPI rose to 2.9% in July from 2.6% and matched consensus, core held at 2.6% against a 2.5% forecast, and services inflation slowed to 3.4% from 3.6%.

FXStreet attributed the sterling rally to the US side, saying the Treasury notice would at least double the size of its longer-dated liquidity support buyback operations, increasing each operation from 2 billion dollars to at least 4 billion starting September 9. Long yields fell, and the dollar was sold broadly against major counterparts in the American afternoon.

FXStreet also noted the dollar unwind extended beyond sterling, with the Swiss franc up close to 1.8% against the dollar on the session and the New Zealand dollar up roughly 1%. The analysis said the move resembled a broad unwind of dollar positions, with the seller indifferent to what it bought instead.

Latest closeGBP/USD 1.354 ▲0.3%

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