Dollar Surges as Bond Markets Implode and GBP/USD Falls to New Lows

The US dollar continues to surge in value as bond markets slump and yields break out across the curve. The recent hawkish Fed rate hike has led to an increase in yield spreads between the US and the rest of the world, with some forecast-beating US macro data and hawkish Fed commentary further supporting the greenback's rally.

The GBP/USD exchange rate has been particularly affected by this trend, as well as the recent dovish Bank of England rate decision. The pair has broken a key level around 1.3270ish and is now targeting the June low at 1.3140 and the November 2025 low at 1.3010.

Economic data has also been supportive of the dollar's rally, with the S&P Global US composite PMI jumping to 58.4 from 56.0 in August, its highest level since July 2021. The result of this hawkish FedSpeak and rising bets of policy tightening have sent the US 10-year yields above 5.0% and 30-year yields testing 2007 highs.