Pound stays above $1.36 amid softer US dollar pressure
The British pound trades above $1.36 in the final full week of August near its strongest level since mid-February as the US dollar weakens on the US Treasury’s longer-dated bond-buy plan and investors await Iran-sanctions details and Fed Chair remarks.
The British pound traded above $1.36 in the final full week of August, near its strongest level since mid-February, as the US dollar faced pressure following the US Treasury’s unexpected plan to at least double its purchases of longer-dated government bonds.
Investors also awaited details on Iran sanctions, while Fed Chair Kevin Warsh’s remarks at Jackson Hole on Friday are expected to offer insights into the interest rate outlook.
In the UK, money markets continue to price in one Bank of England rate hike by year-end, with another quarter-point increase fully anticipated by early 2027.
Recent data showed UK inflation accelerating to 2.9% in July, the highest since March, while core inflation exceeded expectations at 2.6%.
PMI readings indicated faster business activity expansion, and consumer confidence reached a two-year high in August, providing an early boost for new Prime Minister Andy Burnham.
However, the UK remains vulnerable to high inflation driven by the Iran conflict.