Pound plunges 1% against dollar as UK 30-year gilt spikes to near 3 decade high on fiscal concerns

British pound tumbled around 1% against the dollar as UKs 30-year gilt climbed to their highest level in nearly 3 decades. UKs thirty-year gilt yields touched a peak of 5.680%, up about four basis points on the day, their highest since May 1998 over concerns of a widening UK budget deficit due to UK Chancellor Rachel Reeves decision to increase borrowing in last years budget, in turn increasing the risk premium on longer-term gilts because of uncertainty over its rising debts. GBPUSD is quoting at $1.3379, down 1% on the day. Meanwhile, downside in pound and euro over rising fiscal concerns is seen supporting gains in the dollar index that measures the greenback against a basket of currencies in which the two currencies carry maximum weight. Germanys 10-year government bond yields also jumped toward 2.8%, its highest since late March, while 30-year borrowing costs reached levels not seen since 2011, reflecting rising fiscal concerns across Europe. DXY is holding at 98.31. Meanwhile, markets are now focused on the upcoming Autumn Budget, where Finance Minister Rachel Reeves is widely expected to raise taxes to keep fiscal targets on track.

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