Pound Steady as US Treasury's Bond Buyback Weighs on Dollar

The pound maintained its stability on Friday as the US Treasury's bond buyback operations continued to weaken the dollar. GBP/USD traded up 0.32% at 1.3672, while EUR/USD gained 0.27% to 1.1709.

ING's Global Head of Markets Chris Turner warned against over-interpreting the US Treasury's move, saying it was primarily a signalling exercise to address higher long-term Treasury yields.

Treasury Secretary Scott Bessent hinted at possible fiscal consolidation plans centered on a fraud-reduction task force, but Turner noted that most market participants are skeptical about its impact on the near-6% budget deficit.

UBS strategists Constantin Bolz and Dominic Schnider agreed with the dollar-soft view, noting that long-dollar positioning remains vulnerable to a reversal as the case for further Fed tightening fades.