Currency news / September 2, 2025

GBP tumbles as 30-year yields soar

3 min read Thanim Islam

Thanim IslamSeptember 2, 2025

Market snapshot:

Markets more and more concerned about £51bn fiscal gap
EU CPI and US manufacturing in focus for rest of day

Yesterday's currency recap

We saw a very mixed trading session yesterday with USD managing to claw back losses from earlier in the day and GBP managed to erase the losses suffered from Thursday and Friday last week.

Today's GBP rates

Currency pair	Daily move*	Indicative rate**
GBPAUD	0.07%	2.0669
GBPCAD	-0.28%	1.8636
GBPCHF	0.42%	1.0856
GBPDKK	0.16%	8.6394
GBPEUR	0.16%	1.1575
GBPJPY	0.46%	199.5
GBPNOK	-0.40%	13.531
GBPNZD	0.17%	2.2953
GBPSEK	-0.43%	12.721
GBPUSD	0.30%	1.3545

*Daily move - against G10 rates at 7:00 am, 02.09.25
** Indicative rates - interbank rates at 7:00 am, 02.09.25

Key data points

Currency	Event	Period	Consensus	Previous
EUR	CPI MoM	Aug	0.10%	0.00%
EUR	CPI YoY	Aug	2.10%	2.00%
EUR	Core CPI YoY	Aug	2.20%	2.30%
USD	ISM Manufacturing PMI	Aug	49.00	48.00
USD	ISM Prices Paid	Aug	65.00	64.80
USD	ISM New Orders	Aug	48.00	47.10
USD	ISM Employment	Aug	45.00	43.40

What we think

GBP has started the day in the red as 30 gilt yields soared to the highest level since 1998 as markets continue to worry about how Chancellor Rachel Reeves will plug the £51bn fiscal gap. For context, 30-year gilt yields are higher than during the Liz Truss emergency budget. The outlook for GBP continues to be negative with no data this week to give the currency any support.

Inflation numbers are expected to stay around the ECB’s 2% target in this morning's data, which should reinforce the ECB’s cautious stance and should support market pricing for no more rate cuts this year. A number on the downside will be seen as more of a surprise and will likely cause more EUR volatility.

US ISM manufacturing is the highlight for USD with a rebound towards 49 expected from July’s 48 reading. A better-than-expected print in all components will provide some relief for USD and broader risk sentiment and could well ease some of the rate cut expectations by the Fed this year.

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