Pound Drops Toward 1.3210 Against Dollar as UK Fiscal Deficit Pressures Mount

The British Pound dropped toward 1.3210 against the US Dollar in early European trading on Friday, staying bearish below its 100-day simple moving average. Sterling weakened steadily throughout the week following worse-than-expected UK fiscal figures, sliding from around 1.3370 on September 22 to a multi-week low of $1.3356 on September 23 before hitting 1.3210. August public sector net borrowing surged to approximately £18.3 billion, surpassing market forecasts and driving five-month borrowing to £77.3 billion. Concurrently, US Dollar strength was reinforced by a Federal Reserve rate hike to 3.75%-4.00%, while markets priced a 67% chance of a Bank of England hike in November.