Sterling rises above $1.363 to six-month high
Sterling strengthens above $1.363 to its highest level in six months as the US dollar weakens, following unexpected US Treasury plans to at least double longer-dated bond purchases.
363, reaching its highest level in six months as a weaker US dollar boosted major currencies. Sterling benefited from the sharp dollar decline after the US Treasury unexpectedly announced plans to at least double its purchases of longer-dated government bonds. The move is aimed at supporting liquidity and containing elevated long-term borrowing costs, which contributed to a broad rise in G10 currencies. Domestic factors have also supported sterling, with UK inflation remaining relatively high and reinforcing expectations for tighter monetary policy.
Consumer price inflation accelerated to a four-month high in July, although recent labour-market data indicated some cooling in employment conditions. Markets continue to price in one Bank of England rate increase by the end of this year, with another quarter-point hike fully reflected by April next year.