Pound Buckles as US Yields Surge, Fed Hike Odds Hit 93%

The British Pound is under pressure as US Treasury yields surge, increasing bets that the Federal Reserve will raise interest rates this week. The GBP/USD pair has tested two-month lows and remains in the red, down 0.23% amid a light economic docket in the US and UK. Investors' mood is neutral after the recent attacks on Saudi Arabia's East-West pipeline boosted oil prices.

The rise in US yields has put the Dollar in command, with the US Dollar Index (DXY) up 0.39% at 99.47. Prime Terminal sees a 93% chance of a Fed rate hike from 3.50%-3.75% to 3.75%-4%. The Bank of England is expected to keep its interest rates unchanged at 3.75%, widening the interest rate differential and paving the way for further downside in GBP/USD.

Ahead, UK jobs data on September 15 will be closely watched, as well as the FOMC policy decision on Wednesday, which could have a significant impact on the Pound's performance.