Pound Sterling held above 1.36 against the US Dollar as stronger UK inflation expectations limited downside even as the greenback found tentative support.
The Pound remained close to recent highs on Thursday as the US Dollar attempted to stabilise following its sharp Treasury-driven decline.
The Pound to Dollar (GBP/USD) exchange rate traded around 1.3631, up 0.23% on the day and 1.04% higher over the previous five sessions.
That leaves Sterling above the 1.36 level even as traders reassess how far US yields can fall following Washington’s decision to expand long-dated Treasury buybacks.
UK Rate Outlook Limits Sterling Downside
Domestic rate expectations continue to provide some support.
UK inflation rose to 2.9% in July, slightly above the Bank of England’s projection, while markets continue to price more tightening risk than most economists expect.
The counterweight is a cooling labour market, with unemployment at 4.9% and vacancies at their lowest since 2021.
ING strategists Chris Turner and Francesco Pesole had previously expected GBP/USD to remain in a 1.32-1.36 band, saying it was “hard to see a breakout happening anytime soon.”
The pair’s move above 1.36 therefore puts that assumption under pressure, but a durable extension will still require continued weakness in US yields and the Dollar.
Initial support is around 1.3550-1.3600.
As long as that area holds, Pound Sterling‘s downside looks limited, while a sustained break above 1.3650 would bring the 2026 highs back into focus.
Our currency coverage draws on live market data, official economic releases and published bank research.
