GBP/USD: GBP underperforms on softer than expected GDP data – Scotiabank

The British Pound (GBP) is little changed and is underperforming on the session as a result, notes Shaun Osborne, Chief FX Strategist at Scotiabank.

GBP gains are limited in the lower 1.31 zone

“UK GDP was flat in July (below expectations of a 0.2% increase) and rose 0.5% in the July quarter (slightly below forecasts of 0.6%). Details were generally weaker than expected or outright weak (manufacturing).”

“The data suggest a slowdown in growth momentum after a more positive H1, but do not alter the near-term outlook for the BoE, with markets continuing to price in the low risk (4-5 basis points) of a rate cut this month.”

“Soft intraday price action continues to cap GBP gains in the lower 1.31 zone. More range-bound trading looks likely in the near term, with trend signals at very weak and neutral levels. Support is 1.3050/60. Resistance is 1.3115.”

Source: Fx Street

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