Pound Surges Against Dollar Amid US Treasury Buyback Plan
The British pound rose against the US dollar on Thursday to its highest level since February, trading at 1.3639 after touching an intraday peak of 1.3659. The move came as markets assessed US data indicating a solid labor market despite a softer July Nonfarm Payrolls report.
The dollar pared earlier losses after the US Treasury outlined a bond buyback program aimed at improving liquidity at the long end of the curve, which some markets saw as a form of yield curve control. The primary driver behind this move is the ongoing weakness of the US Dollar and the US Treasury's aggressive bond buyback program.
According to analysts, the British Pound remains resilient due to sticky domestic inflation, which continues to fuel expectations of steady interest rates. Recent UK data shows core services inflation holding firm at 4.6%, keeping the Bank of England from cutting rates as quickly as its peers.