Sterling Hits Six-Month High on US Debt Move, No UK Data This Week

The Pound Sterling has reached its highest level in six months, but it's not due to any British economic data this week. The rally began on August 19 when the US Treasury announced it would at least double its purchases of longer-dated government debt, which led to a fall in the Dollar and a rise in every major currency.

The long-term interest rates supported by these purchases remove part of the yield that supports the Dollar. However, rearranging the maturity of existing debt does not change the quantity of it, and markets have raised objections within a day.

Large speculators are still net short more than 54K Pound contracts, which suggests that this is a squeeze rather than a trend. Squeezes often give ground faster than they take it.