Fed Hike Bets Send Pound Plummeting to Two-Month Low

The Pound-Dollar exchange rate has been under pressure due to rising expectations of a Federal Reserve interest rate hike. The GBP/USD fell to a two-month low last week after US macroeconomic data suggested a more aggressive pace of monetary tightening from the Fed.

Investors increased their bets on another 25-basis-point hike at the Fed's October meeting, with the probability rising to around 70% from 50%. The Pound (GBP) struggled throughout the week, weighed down by an unexpected surge in UK public borrowing and a sharper-than-anticipated slowdown across the vital services sector.

The employment data could catapult the 'Greenback' to fresh highs if another healthy expansion of the US jobs market helps to cement expectations the Fed will raise rates again at its next meeting. Back in the UK, a sparse economic calendar leaves Sterling without any clear domestic catalysts, leaving its performance largely dependent on broader currency trends.