Pound Stagnates as Treasury Yields Hit 20-Year High

The British Pound (GBP) remains stuck near 1.3200 against the US Dollar as Treasury yields climb to their highest levels since 2002. Despite trading at its strongest point against the Euro in 2026, the Pound shows little movement against the Dollar, reflecting the impact of rising US 10-year yields, which hit 5.35% on Monday. The UK economic calendar is quiet, with no major data releases expected until Friday, though three Bank of England speeches are scheduled.

The Pound's strength against the Euro has helped it stay afloat against the Dollar, as investors favor British assets amid France's bond selloff. However, the odds of an October Federal Reserve rate hike have dropped from 66% to 20%, reducing some upward pressure on the Dollar. The Pound's range-bound trading since late September suggests cautious investor sentiment, with key resistance at 1.3250 and support near 1.3200.

With no significant UK economic data on the horizon, the focus shifts to the Federal Open Market Committee (FOMC) minutes due on Wednesday and Chancellor Jeremy Healey's first budget on October 28. Traders are already pricing in a quarter-point rate hike from the Bank of England in November, but the Pound's next move may depend on whether the Fed signals further rate increases.