LONDON
The British pound has extended its losing streak, declining for a sixth consecutive day amid broader dollar strength and lingering concerns over UK assets.
Sterling fell 0.4% to $1.2156, marking a challenging week for the currency after hitting a 14-month low of $1.2097 on Monday.
The pound’s slump comes as the US dollar hovers near its strongest level in over two years against a basket of major currencies.
Robust US economic data has prompted traders to scale back expectations of Federal Reserve rate cuts, boosting demand for the greenback and weighing on rival currencies.
The pound’s decline has been accompanied by a volatile week for UK government bonds, or gilts.
Last week’s global market turbulence triggered a sell-off in gilts, driving yields sharply higher.
The yield on 30-year gilts reached its highest level since 1998, underscoring investor concerns about the UK’s public finances and economic outlook.
Meanwhile, the UK government has sold £1 billion worth of inflation-linked bonds under the most expensive conditions in over 19 years, highlighting the growing cost to taxpayers of the recent turmoil in bond markets.
The sale reflects the impact of a sharp rise in borrowing costs that has driven yields to multi-year highs.
The Debt Management Office (DMO) sold inflation-linked gilts maturing in 2054, receiving bids worth 3.06 times the offered amount.
The UK is among the markets hardest hit by a global surge in borrowing costs.
This reflects concerns about rising inflation domestically and in the US, as well as diminishing expectations for interest rate cuts in both countries.
Uncertainty surrounding the economic policies of Donald Trump, who is set to take office next week, has further contributed to market volatility.
