GBP/USD Slumps to 7-Month Low as Trump-Xi Meeting Looms

The Pound-US Dollar exchange rate has hit its worst levels since late July due to hawkish Federal Reserve rate bets and dovish Bank of England remarks. The GBP/USD sank to around $1.3290, down roughly 0.4% from Wednesday's opening levels.

The US Dollar maintained a positive trajectory on Wednesday, with the currency drawing support from expectations of further interest rate increases from the Federal Reserve. Fed policymakers have reinforced this outlook, with Boston Fed President Susan Collins arguing that a somewhat more restrictive policy stance is needed to bring inflation sustainably back to the central bank's 2% target.

Lingering geopolitical uncertainty also continued to support USD demand, particularly after an inflammatory speech from US President Donald Trump at the United Nations General Assembly on Tuesday. The Pound lost ground on Wednesday after fresh survey data revealed a noticeable loss of momentum across the UK's dominant services industry.