The British Pound's growth beat came from a dead ceasefire
The Pound holds just under 1.3500 on Thursday inside a session range barely 40 pips wide, which is a thin response to a morning that handed Britain a growth beat and an afternoon that handed the Dollar a soft inflation print.
The British Pound's growth beat in June was largely driven by a temporary ceasefire in the Gulf, the start of the World Cup, and favorable weather, according to a post from The One Rule That Matters. The report highlighted that the services sector carried the June advance, with talks on reopening the Strait of Hormuz deadlocked and transits running lower than average.
The factory side of the release, however, showed a decline in industrial production and manufacturing output. Despite the growth print, the June GDP rose only 0.3% against a consensus of no growth, and the second-quarter YoY rate came in at 1.2% against expectations. The Pound has climbed roughly two cents since the start of August, reclaiming the 50-day and 200-day Exponential Moving Average band near 1.3400.
However, the growth was not consistent across all components, with industrial production falling and manufacturing output declining. The report also noted that the cross rates showed the Pound losing ground against other currencies, indicating it was being measured against something being sold rather than being bought. The next two major domestic readings, Labour market figures and July inflation, are expected to provide further insights into the Pound's future direction.
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