GBP/USD Hits Three-Month Low Amid Global Bond Sell-Off

The Pound to Dollar exchange rate hit a three-month low near 1.3200 before recovering slightly on Friday, according to CurrencyNews.co.uk.

Scotiabank analysts noted that the GBP had fallen below its late July low at 1.3277, indicating potential for further weakness towards the mid-1.31s and retest of the June low around 1.3140.

The surge in global bond yields remains a key driver of Dollar support, with the US 10-year Treasury yield reaching its highest level since 2007 at above 5.20% on Friday.

ING cautioned that while the move is becoming stretched relative to fundamentals, any upside surprise in upcoming US data releases could prompt markets to fully price in an October Fed hike and prop up short-term rates even more.