British Pound outperforms at the start of the UK Q2 GDP data week

The British Pound (GBP) began the week with an upward trend against its major currency counterparts, reaching approximately 1.3500 against the US Dollar (USD) during the European trading session on Monday. Analysts at Rabobank noted that GBP net shorts rebounded higher during the previous week, signaling a growing bearish positioning on the currency.

Although the Monetary Policy Committee (MPC) adopted a more hawkish stance than anticipated, their communicated tone was described as dovish, suggesting limited support for the GBP from the Bank of England (BoE) in the near term. The UK's preliminary Gross Domestic Product (GDP) data for Q2, scheduled for release on Thursday, is expected to show a 0.4% growth rate, which is slower compared to the previous 0.6%.

This weaker performance, combined with rising oil prices and global inflation expectations, may hinder the GBP's momentum in the short run. Meanwhile, the US Dollar (USD) edged higher on Friday, trading near 99.60 on the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies. However, market expectations anticipate a decline in the USD value in the near term, as traders believe the Federal Reserve (Fed) is unlikely to raise interest rates at the September meeting.