Sterling remains near 1.3600, down 0.4% as August gains stem from US Treasury moves rather than UK economic data.
The British pound traded just below 1.3600 late Wednesday, retreating 0.4% from a session high of 1.3650 after US economic data triggered a 50-pip drop. The pair has since stabilized at lower levels, reflecting broader dollar weakness rather than UK-specific drivers.
Sterling’s August rally, lifting it from 1.3300 to near 1.3700, has been underpinned by rising technical indicators, including a 50-day EMA at 1.3450 and a 200-day EMA at 1.3400. However, the move lacks clear support from UK fundamentals, with July inflation at 2.9% and the Bank of England holding rates at 3.75% on a 6-3 vote.
The currency’s strength aligns more closely with US Treasury actions, including increased long-dated debt purchases, which have pressured the dollar across major pairs. For the rally to sustain, sterling must demonstrate resilience against dollar rebounds.