Dollar Soars to Three-Week High Against Pound Amid Middle East Tensions

The US dollar has surged to a three-week high against the British pound due to growing concerns over an energy shock and diverging monetary policy paths across major economies.

The pound fell by 0.05% to $1.3510, its lowest level since August 14, as investors closely monitored the conflict in the Middle East and selling pressure in UK government bond market.

UK government bond yields have climbed to fresh 18-year highs, adding to the challenges facing Finance Minister John Healey ahead of his first budget on October 28. Healey has pledged to adhere to the borrowing rules inherited from his predecessor, Rachel Reeves.