GBP/USD Movement After US GDP Growth
- GBP/USD has dipped below the 1.3500 mark following a robust 3.3% growth in US GDP for the second quarter.
- The US dollar is facing some pressure as expectations of a dovish Federal Reserve grow.
- Traders are looking forward to the upcoming July PCE Inflation Report for insights on financial policy direction.
The British Pound (GBP) has weakened against the US Dollar (USD) as of Thursday, undoing earlier gains after reaching a high of 1.3526. Currently, GBP/USD is hovering around the significant 1.3500 level. This cautious price behavior seems to reflect the mixed economic data that has recently come out.
According to the Bureau of Economic Analysis, the second GDP estimate for the US confirmed an annual growth of 3.3%, surpassing the anticipated 3.1% and the previously reported 3.0%. The labor market is also looking resilient; initial unemployment claims have dropped to 229,000, which is slightly better than expected and down from the revised figure of 234,000.
Meanwhile, inflation metrics showed some moderation. The initial reading of the core personal consumption expenditure (PCE) price index indicated a rise to 2.5%, against a forecast of 2.6%. The headline PCE price index and GDP price index both registered at 2.0%. This blend of stronger growth and modest inflation has led to limited movement in the US dollar, which remains under considerable pressure.
The US Dollar Index (DXY), monitoring the greenback against a selection of six major currencies, is inching back toward the 98.00 mark, recovering from an intraday low of 97.84 seen earlier in the day. As it stands, market attention is now pivoting towards the forthcoming July PCE Inflation Report coming out on Friday.
