GBP/USD Falls to Three-Month Low as Fed-BoE Divergence Widens

The GBP/USD pair has fallen to a three-month low, despite only a 0.5% decline in the third quarter.

In September, the sharp decline of the pound against the US dollar came as the USD staged a powerful recovery, but the pound also weakened against major peers like the Japanese yen and Australian dollar.

The balance of risks points to a downside bias for the pound against the US dollar in Q4, due to widening Fed-BoE policy divergence that continues to support the USD.