GBP Crashes to Six-Week Low as Global Bond Selloff Grips Markets

The Pound to Dollar exchange rate has hit its lowest levels since mid-August due to a global bond selloff, with GBP/USD trading at around $1.3477, down 0.3% from opening levels.

The US Dollar firmed against most of its peers as investors sought safe-haven currencies amidst rising energy prices and inflation concerns, driving government bond yields sharply higher.

Renewed expectations for a Federal Reserve interest rate hike later this month have boosted USD demand, with odds now at around 70% since last week.

The Pound struggled to attract support as domestic borrowing costs soared, with the benchmark 10-year gilt yield hitting levels not seen since 2008 and the 30-year yield reaching its highest since 1998.

These developments pose unique risks for Westminster, particularly with Chancellor John Healey finalizing his Autumn Budget next month.