Forex
GBP Surges on US Dollar Weakness Following Treasury Bond Buybacks
The British Pound (GBP) has gained strength against the US Dollar (USD), appreciating by 0.25% to trade at 1.3639, its highest level since February. This upward movement comes after the release of solid US jobless claims data.
The USD had posted losses following the US Department of the Treasury's announcement of a bond buyback program aimed at providing liquidity for long-term bonds. Markets interpreted this move as a form of Yield Curve Control (YCC).
Scotiabank strategists Shaun Osborne and Eric Theoret note that GBP/USD gains into the mid-1.36s are driven more by USD weakness than intrinsic GBP strength.