The British pound rose 0.25% to $1.3640 on Thursday as the U.S. dollar declined following an unscheduled announcement by the U.S. Treasury to expand liquidity buyback operations by $2 billion.
The move targeted longer-dated Treasury yields, which fell roughly 10 basis points in response. Shorter-dated yields also eased by about 5 bps after the release of the Federal Open Market Committee's July meeting minutes. Analysts at ING noted the intervention signaled official discomfort with recent bond market volatility, particularly at the long end.
The U.S. Dollar Index (DXY), which had been consolidating in a 99.40–100 range, broke lower and approached the 98.65 support level, with 98 identified as the next potential floor. The euro also strengthened 0.21% to $1.1702, trading near ING's end-September target of $1.17.
ING's Global Head of Markets, Chris Turner, described the Treasury's action as a form of "Bessent Put"—a reference to former U.S. Treasury official Brian Bessent—suggesting a backstop against excessive long-end yield spikes. Turner added that the move reduces risks to carry trade strategies and could support risk assets through the summer.
The dollar's decline occurred despite the release of FOMC minutes from July, which were viewed as broadly balanced and not materially hawkish. Two Federal Reserve policymakers, Mary Daly and Alberto Musalem, were scheduled to speak later in the day, though their remarks were not cited as immediate drivers of market moves.
Sterling's gains were attributed primarily to dollar-side weakness rather than domestic UK factors, as the currency pair traded without significant UK-specific catalysts. Resistance for EUR/USD was noted at 1.1700, with a break potentially targeting 1.1790. Support levels were identified around 1.1650–1.1660.
The Treasury's intervention follows data showing foreigners purchased approximately €1.1 trillion in eurozone securities over the past 12 months, including a record €200 billion in June. The ECB's balance sheet dynamics continue to influence broader FX sentiment as the central bank maintains its policy stance.
