GBP Slumps Below 1.3200 as Weaker Manufacturing Data and Higher Yields Boost USD
The British Pound (GBP) has fallen to fresh three-month lows against the US Dollar (USD), reversing its gains from Wednesday. The GBP/USD pair dropped below 1.3200 on Thursday, with UK manufacturing activity data contributing to the decline.
A weaker-than-expected reading in the S&P Global Manufacturing PMI, revised lower to 51.9 in September, has weighed on the Pound. Analysts at Rabobank note that speculative positioning on the GBP has deteriorated, with net shorts increasing by over 40% to their highest level since August.
The US Dollar's strength is being driven by higher long-term US Treasury yields, which hit fresh 24-year highs above 5.30% on Thursday. The yield of the benchmark 10-year note and the 30-year note also reached multi-decade highs at 5.68%. Despite cooling hopes for a rate hike in October, the two-year yield remained steady around 4.90%.