Pound Surges as US Treasury Buyback Weakens Dollar

The British Pound has strengthened against the US Dollar after the US Treasury stepped in to offer liquidity support through a buyback of longer-dated bonds. This move pushed US yields lower and weakened the Dollar, with the US Dollar Index down 0.84% at 98.80.

The rise in long-term US yields was driven by higher-than-expected inflation expectations due to elevated oil prices resulting from the ongoing US-Iran conflict. The absence of a resolution has kept tensions high, and the situation remains volatile.

Meanwhile, traders are bracing for the release of the Federal Reserve's last meeting minutes, which could provide clues on the Fed's next move. The minutes will be closely watched, especially given the new Fed Chair Kevin Warsh's silence since taking office.