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GBP/USD holds near 1.3500 despite upbeat UK GDP data

Brown Brothers Harriman said the GDP prints are unlikely to change Bank of England rate expectations, with July CPI seen as the key catalyst next.

Reported · Written up by our desk · Major Pairs

GBP/USD was trading directionless around 1.3500 as investors weighed UK Q2 and June GDP data, which suggested encouraging economic activity, according to commentary from Brown Brothers Harriman’s Elias Haddad shared by FXStreet.

BBH noted that growth in Q2 was supported by investment and household consumption, while government spending was a drag. Monthly data also came in stronger than expected, with June real GDP rising 0.3% month over month, versus a consensus decline, driven by a rise in services output.

Despite the improving activity signals, Haddad judged that the UK GDP releases are unlikely to shift the dial on Bank of England rate expectations. He pointed to the upcoming July CPI report as the more important inflation input for policy decisions.

FXStreet also described the broader context for the pair, noting the UK releases did not trigger a noticeable market reaction and that the US dollar was stabilizing after a CPI-driven sell-off, keeping GBP/USD pinned near the psychological level.

Latest closeGBP/USD 1.349 ▼0.1%

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