GBPUSD Back at the Highs, Helped by Positive UK GDP

GBPUSD turned bullish in August after the downtrend in July and despite some resistance at 1.2870s, it kept returning to this level, indicating that buyers want to push higher toward 1.30. Today we had the Q2 GDP report which came better than expectations, keeping the GBP supported during dips.

Recent strong economic data from the UK have provided solid support for the GBP. Earlier this week, the UK jobs report led to a dip in the GBP/USD to 1.2872. Despite some skepticism about the data, the report played a key role in boosting the GBP, highlighting a significant drop in the unemployment rate.

GBP/USD Chart H4 – The 100 SMA Has Turned into support

However, this positive headline was tempered by a rise in unemployment claims and a roughly 1% decrease in earnings. Today’s June GDP report, which followed the Q2 data, further underscored the UK’s robust economic growth and helped ease fears of a recession. That has kept the BOE from cutting interest rates until August’s meeting, when they announced a 25 basis point drop.

UK Q2 and June GDP Report Released by ONS – 15 August 2024

• Q2 Preliminary GDP:

  • +0.6% q/q (in line with expectations)
  • Previous: +0.7%
  • +0.9% y/y (in line with expectations)
  • Previous: +0.3%

• Contributions to Q2 GDP:

  • Gross Capital Formation: +2.38%
  • Government Consumption: +0.30%
  • Household Consumption: +0.12%
  • Net Trade: -2.20%
  • Summary: Indicates a robust Q2 for the UK economy, which supported the Bank of England’s (BOE) resistance to rate cuts until early August.

• June Monthly UK GDP:

  • MoM GDP 0.0% (in line with expectations)
  • May GDP: +0.4%

• Sector Performance:

  • Services: -0.1% m/m (expected +0.1%)
    • Previous: +0.3%
  • Industrial Output: +0.8% m/m (expected +0.1%)
    • Previous: +0.2% (revised to +0.3%)
  • Manufacturing Output: +1.1% m/m (expected +0.1%)
    • Previous: +0.4% (revised to +0.3%)
  • Construction Output: +0.5% m/m (expected -0.1%)
    • Previous: +1.9% (revised to +1.7%)

GBP/USD Live Chart

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Skerdian Meta

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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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