British Pound Rallies Against US Dollar on Positive GDP Data

The British pound today rallied higher against the US dollar after the release of preliminary UK GDP data for the second quarter, which met expectations. The British pound initially dropped after the GDP announcement before gaining traction and rallying higher against the US dollar after British finance minister Philip Hammond‘s comments on Brexit.
The GBP/USD currency pair gained over 60 points at the height of its rally from a daily low of 1.3000, which is a psychological barrier.
The preliminary UK GDP data for the second quarter released by the Office for National Statistics indicated that the British economy had expanded by 0.3% as compared to 0.2% growth in the first quarter. Although the GDP figures met expectations, they lowered the markets’ expectation of a rate hike from the Bank of England due to the sluggish economic growth. The currency gained fresh impetus after Philip Hammond commented that a transitional Brexit deal would be good for UK businesses.
The US dollar has been quite strong against the British pound despite its general weakness against other currencies. However, today’s brief rally indicates that the pound might be recovering ground against the greenback. The US Dollar Index, which tracks the greenback’s performance, was trading above its opening price, indicating that the US dollar was quite strong.
The currency pair’s future performance is likely to be affected by the Federal Open Market Committee rate decision, which will be announced at 18:00 GMT today.
The GBP/USD currency pair was trading at 1.3054 as at 15:00 GMT having dropped from a high of 1.3063. The GBP/JPY was trading at 146.19 having rallied from a low of 145.48.

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