The Pound US Dollar (GBP/USD) exchange rate has edged higher this morning despite a slowdown in growth in the UK’s economy.
At the time of writing the GBP/USD pairing are trending around the $1.3861 level as US Dollar traders await the latest producer price index data from the US later this afternoon.
Pound (GBP) Supported on UK GDP Figures
The Pound has found itself supported against many of its major rivals this morning on the back of the latest GDP figures from the UK for July.
UK GDP rose just 0.1% during July as supply-chain issues plagued the economy, however the 0.1% recorded was an expansion.
However growth was at its lowest level seen since January as a sharp rise in UK coronavirus cases also worried investors.
Ed Monk, associate director at Fidelity International commented on the latest GP figures, saying:
‘Growth of just 0.1% in July marks a significant slowdown and it’s a concern that most areas of the economy were flat across the month – only production showed a positive reading while services and manufacturing were flat, and construction fell.’
‘It now looks like the wait for the UK to regain the ground lost since the start of the pandemic will last well into next year.’
US Dollar (USD) Awaits US Economic Data to Drive Movement in Currency
The US Dollar has found itself struggling across the board this morning as the negative correlation between the Euro and Dollar sees the currency struggle.
The Euro has found itself moving higher this morning on the back of positive German inflation data which in turn caused the ‘Greenback’ to struggle.
More so an absence of economic data from the US this morning has done little to support the appeal of USD exchange rates.
This afternoon however will see the release of both PPI and wholesale inventories figures from the US which could provide the US Dollar with fresh impetus to head higher into the weekend.
Pound US Dollar Exchange Rate Outlook: UK Employment Change Figures in Focus
Heading into next week, for Pound investors all eyes will be on the latest employment change figures from the UK for August.
If the unemployment rate in the UK continues to fall then the Pound could find itself supported at the start of next week.
US Dollar traders will be focusing on the latest inflation rate data from the US for August.
If US inflation remains high traders may become concerned that the Federal Reserve could raise interest rates sooner than first thought.