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British pound drops to three-week low versus dollar amid US yields
GBP/USD traded around 1.3500 after ADP showed softer private hiring in August, while investors weighed Middle East risks that could lift energy and inflation expectations.
The British pound fell to a three-week low against the US dollar, with GBP/USD dropping about 0.1% to trade near 1.3500 after reaching 1.3474, according to FXStreet.
The move came even as the US Dollar Index was in the red, with FXStreet pointing to a recent US jobs read that was below estimates but signaled cooling in the labor market.
FXStreet also tied the pressure on sterling to geopolitical tensions in the Middle East, where recent US and Iran strikes have kept energy prices elevated and raised concerns about a potential second round of inflation.
Looking ahead, FXStreet said UK and US economic events are on the calendar, including a UK budget set for October 28 and, in the US, ISM Services PMI and the Nonfarm Payrolls report, while it noted money markets expect the Bank of England to tighten further by December, with 32 basis points of tightening priced in.
Latest closeGBP/USD 1.348 ▼0.2%|Dollar index 99.58 ▼0.1%