Pound and Euro Gain as Dollar Rally Shows Signs of Exhaustion
The Pound sterling traded slightly higher on Thursday while the euro inched up as the dollar's recent surge showed early signs of exhaustion.
The dollar index, which represents a basket of currencies including the USD, EUR, JPY, and others, held near its highest level since 2007 at around 101.0.
According to ING FX strategist Francesco Pesole, 'the dollar rally has accelerated and the move is starting to look stretched,' adding that ING expects a correction in the DXY index in the coming weeks with a return to the 100-100.5 area if further data surprises fail to materialise.
The 10-year Treasury yield consolidated near multi-year highs after surging around 15 basis points on Wednesday, driven by stronger-than-expected U.S. business activity data stoking bets that the Federal Reserve would keep rates elevated for longer.