GBP/USD Tumbles to Three-Month Low Amid Hawkish Fed and Weakening Pound

The GBP/USD has fallen by just 0.5% across Q3 but is trading at a three-month low.

In September, the pair plummeted over 2%, largely due to the US dollar's strong recovery and the pound's weakening against major peers such as the Japanese yen, Australian dollar, and Canadian dollar.

However, the balance of risks points towards a downside bias for the pound against the US dollar in Q4, as the widening Fed-BoE policy divergence continues to support the USD.