British Pound and Euro Fall Against Dollar on Strong Headline US GDP

The Pound-to-Dollar exchange rate lost ground on Wednesday following the release of the US’s latest GDP reading and ahead of the Federal Reserve’s latest interest rate decision.

At the time of writing, GBP/USD was trading at approximately $1.3327, down roughly 0.2% from the start of Wednesday’s session.

The US Dollar (USD) advanced across the board on Wednesday, buoyed by stronger-than-expected GDP data ahead of the Federal Reserve’s July interest rate decision.

Second-quarter GDP figures revealed a sharp rebound in the US economy, with growth surging from -0.5% to 3%, comfortably beating the forecast of 2.4%.

This unexpected upswing in economic activity provided solid support for the ‘Greenback’ in the afternoon.

With the Fed widely expected to keep interest rates steady this month, investor focus shifted to the tone of the accompanying statement.

Any hawkish signals from policymakers will likely help the US Dollar maintain its upward momentum heading into Thursday’s European trading session.


The Pound (GBP) continued to drift midweek, with a lack of meaningful UK data leaving the currency directionless and trading within a narrow range against its major peers.

Sterling struggled to gain traction on Wednesday, as the absence of fresh economic indicators offered little support.

Earlier in the week, data from the Bank of England (BoE) showed that consumer credit rose by £1.417 billion in June, surpassing expectations and hinting at ongoing household spending.

However, economists were quick to warn that this uptick might not be a sign of economic resilience. Instead, it could reflect growing financial strain, as households potentially resort to borrowing to manage everyday expenses amid rising unemployment concerns.

With no new developments on the economic calendar, GBP exchange rates remained largely flat, lacking any catalysts to shift sentiment.

As Thursday approaches, attention will remain on US economic data, which will likely drive movement in the GBP/USD exchange rate.

In focus will be the latest core PCE price index, a key inflation gauge closely monitored by the Federal Reserve.


Forecasts suggest the index will remain unchanged at 2.7% year-on-year.

Should the data meet expectations, it could bolster the case for the Fed to maintain its hawkish policy stance, likely lending support to the US Dollar.

Meanwhile, the Pound may continue to tread water in the absence of any notable UK releases.

With no domestic catalysts to spur movement, Sterling is expected to remain confined in a narrow range as the week draws on.

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