USD to GBP Rate Holds After Flat UK July GDP

The USD to GBP rate showed stability yesterday, trading in a tight range despite the shift in risk sentiment, which comes after some volatile price action in GBP/USD. Today the main event for the day is the US inflation CPI which will likely offer some volatility for this pair and other USD pairs, but in the European session, we had the UK GDP report as well.

Last month the GBP/USD pair experienced strong bullish momentum, climbing by 6 cents and breaking above 1.32. However, sellers have since re-entered the market, pushing the exchange rate down by 2 cents, signaling a potential shift in market direction. Despite a general decline in other major currencies, the GBP held relatively steady against the USD, ending the day unchanged.

GBP/USD Chart Daily – Holding Above 1.30

Yesterday, the pair hit resistance around the 1.3040 level, which corresponds to the high seen in July. This level has proved challenging for sellers, as they’ve been unable to push the price below the key 1.30 support. The latest UK employment data revealed a drop in the unemployment rate for July, along with an increase in new job creation. While today’s UK economic data brought further insights, the highlight of the European session was the release of the July GDP report, which attracted significant attention.

The UK economy showed stagnation in July, with 0.0% GDP growth for both June and July, falling short of expectations. Services showed minor growth, while industrial and manufacturing outputs saw significant declines, dragging down overall performance. Construction also contracted, adding to the broader slowdown in economic activity.

UK GDP Report for July

• July monthly GDP: 0.0% (versus +0.2% expected)
  • June monthly GDP: 0.0%

Sector Breakdown:

• Services: +0.1% (versus +0.2% expected)
  • Previous: -0.1%
• Industrial output: -0.8% (versus +0.3% expected)
  • Previous: +0.8%
• Manufacturing output: -1.0% (versus +0.2% expected)
  • Previous: +1.1%
• Construction output: -0.4% (versus +0.4% expected)
  • Previous: +0.5%

GBP/USD Live Chart