The British pound fell against the dollar after the U.K. government announced a plan to boost growth.
At 12:20 p.m., the pound was at $1.1029. The measures were announced in the House of Commons.
This month is the first time since 1985 that the pound has hit a level against the US dollar. Friday's measures were billed by the government as heralding a new era for the U.K. and included a mix of tax cuts and investment incentives for businesses.
The U.K. economy was likely already in a recession as a result of the 50 basis point interest rate hike by the Bank of England.
The U.K. bonds were dumped by investors due to a rise in government debt. Paul Johnson, director of the Institute for Fiscal Studies, said markets were "stunned" by the scale of the fiscal handout.
The yield on the 2-year U.K. bonds rose by the highest amount since 2009. Prices affect yields.
The U.K. equity markets fell as well.
The market appeared skeptical of the government's 2.5% growth target, but the measures were designed to boost demand.
The implication is that the rates will be higher for longer. She said that while textbooks suggest that higher short-term interest rates should be supportive of the currency, it's not always the case.
With the U.K. hitting a record debt-to-GDP ratio, the pound is vulnerable to a downward revision if foreign investors aren't willing to fund the deficit.
The euro fell against the dollar after a release showed the euro zone's Purchasing Managers' Index fell in September. The bloc is likely to enter a recession, according to S&P Global.
Equity market volatility and the Federal Reserve raising their interest rates have boosted the dollar.
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