GBP/USD Slumps to Lowest Since June Amid Diverging Interest Rates

The British pound (GBP/USD) has hit its lowest level since late June, closing at 1.3216 on September 24.

This marks a decline of 3.17% over the past month and 0.89% over the past year.

The move is largely attributed to the divergence in interest rates between the UK and US, with the Federal Reserve raising its target range to 3.75% to 4.00%, while the Bank of England held Bank Rate at 3.75% in a 6-3 vote.

The BoE's decision was not a surprise, as markets had priced a 76% probability of a hold, but it reinforced the message that the Fed is tightening while the UK central bank is waiting.