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[MUFG Analyst Says Pound's Decline May Widen] The Pound Might Extend Its Losses As Investors Grow Increasingly Uneasy About The Ongoing Selloff Of UK Gilts, Said Lee Hardman, Senior Currency Analyst At MUFG. While The Rise In Gilt Yields Appears Broadly Aligned With Similar Movements In Other Bond Markets, The Increase In Borrowing Costs Could Pressure The Government To Tighten Fiscal Policies. Last Year, The Pound Benefited From Rising Yields As The Bank Of England Maintained A Cautious Stance On Rate Cuts. However, Hardman Noted That Recent Market Trends Highlight A Key Point: When Yield Increases Are Driven By Concerns Over The UK's Public Finances And Inflation, They Don't Necessarily Support The Currency. He Added That The GBP/USD Pair Could Drop Below 1.20.
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