Pound Surges to Six-Month High as US Treasury Bets on Yield Capping

The British pound has reached a six-month high against the US dollar, climbing 0.4% to $1.3661 on Thursday.

This rise comes after the US Treasury announced plans to at least double its purchases of longer-dated US government bonds, which pushed the 30-year Treasury yield sharply lower.

According to Louis-Vincent Gave, CEO of Gavekal Research, 'A U.S. Treasury actively signalling that it is looking to cap long-term yields is bearish news for the U.S. dollar.'

The pound has also received support from domestic economic developments, including UK inflation rising to a four-month high in July.