Pound Bounces Back After a Solid UK GDP Report
What the Data Says
The pound gave us a happy wink when UK GDP data came out with a 0.6% jump in Q2, following a tidy 0.7% rise in Q1—exactly what the market expected.
Inflation & The BoE’s Game Plan
- Inflation ticked up to 2.2% in July, just a hair below the 2.3% forecast.
- The Bank of England plans to keep easing policy, which could cap the pound’s upside.
- Yields nudged higher but may stay under pressure as monetary policy continues to soften.
U.S. Retail Sales: The Next Storyteller
Today’s big headline isn’t just about Britain. U.S. retail sales are projected to rise by 0.3% in July. If they come in stronger, consumer spending could lift Treasury yields and boost the dollar—potentially squeezing the pound‑dollar pair. Conversely, a robust UK retail sales number might give the pound a boost.
Bottom Line
In short, the pound’s bounce looks solid, but keep an eye on U.S. retail—what happens there could rewrite the story for the next trading session.
