GBP/USD Extends Losses to 1.3450 as UK Yields Narrow, Dollar Strengthens

GBP/USD added to Thursday’s losses, falling to around 1.3450 in Asian trading on Friday. The pair has now declined for two consecutive sessions as the pound softens against a broadly stronger greenback.

Narrowing yield spreads between UK and US government bonds are weighing on sterling, even as domestic political risks linger. The move reflects a shift in rate expectations that favours the dollar, which continues to find support from higher-for-longer US interest rate bets.

The pound’s weakness comes despite previously resilient UK economic data, with the market reassessing the Bank of England’s rate path relative to the Federal Reserve.