GBP/USD Plunges Amid Rising Global Risks and Escalating Tensions

The GBP/USD pair continues to struggle under pressure from rising global risks and higher US-Iran tensions. The currency retreated to 1.3515, down modestly from last month's high of 1.3672. This comes as the US launched another attack in response to Iran’s attempts to place mines in the Strait of Hormuz, with President Donald Trump warning of a stronger attack if Iran retaliated.

The escalating tensions led to higher energy prices, with Brent rising to $95.15 and the West Texas Intermediate (WTI) reaching a high of $90, a 30% increase since February this year. Meanwhile, global bond yields continue to rise, with the ten-year yield jumping to 4.80%, its highest level in years.

The UK gilts also rose, with the ten-year yield gapping higher to 5.25%, its highest point since 2007. This comes as investors focus on soaring spending by the US and the UK, coupled with slowing economic growth.

In the UK, data released this week confirmed that the economy was slowing, with the number of job openings in the US falling to 7.27 million in July, lower than expected. The ISM manufacturing PMI also dropped from 55.6 to 54.6, lower than the average estimate.