Pound Sterling Gains Ground on Strong Economic Data
The Pound Sterling strengthened significantly on Thursday, buoyed by better-than-expected UK economic growth figures. The UK economy expanded by 0.6% in the second quarter, surpassing market expectations and easing concerns about a potential recession.
The positive GDP data, coupled with a recent slowdown in core inflation, has led to a reassessment of the Bank of England's monetary policy path. While expectations for a rate cut in September have increased, the market is now pricing in a less aggressive easing cycle.
Conversely, the US Dollar weakened as investors increased their bets on more substantial Federal Reserve rate cuts following the release of softer-than-expected US inflation data.
Technical Outlook
The GBP/USD pair has shown strong upward momentum, with the potential to test the 1.2900 and 1.3000 levels. However, a pullback towards the 20-day EMA could provide an opportunity for short-term buying.