Pound-Dollar Rally May Stall at $1.36
The pound-to-dollar exchange rate may not advance much beyond $1.36 due to the U.S. dollar's resilience, according to ING Bank strategists.
ING warns that higher energy prices and rising 30-year Treasury yields could put a September Federal Reserve rate hike back on the agenda, with markets lifting September hike pricing to 9 basis points from 7 this week.
Rising oil and gas prices are driving up energy costs, which analysts attribute to Washington's lack of interest in extending the 60-day ceasefire with Iran.
The heavy investment-grade issuance from U.S. hyperscalers, including Microsoft, Amazon, Meta, and Oracle, is also contributing to higher long-end yields, as these companies issue record amounts of debt to fund massive capital expenditures in artificial intelligence (AI) infrastructure and data centers.