GBP/USD Hits Two-Month Low as Oil-Linked Inflation and UK Fiscal Worries Weigh

The Pound Sterling has been experiencing a decline in value against the US Dollar, reaching its lowest level since June 26. The GBP/USD pair traded below 1.3200 during the Asian session on Friday and is expected to log modest declines for a third consecutive week.

The US Dollar Index (DXY) held firm near a one-and-a-half-year high due to oil-related inflation concerns, which limited the pullback in U.S. government bond yields from their multi-year highs. This helped maintain support for the Dollar and contributed to the downward bias in GBP/USD.

The UK fiscal worries also added pressure on the Pound ahead of the October 28 Autumn Budget, with 30-year gilt yields rising above 6% for the first time since early 1998.