Pound Falls Against US Dollar As UK GDP Contracts 20.4% in Q2

The  Sterling pound today fell against the  US dollar amid worries that the  UK economy was not recovering fast enough following its reopening after the  coronavirus lockdowns. The  GBP/USD currency pair today headed lower after the  UK’s Finance Minister Rishi Sunak said that many people would lose their jobs due to  the  COVID-19 pandemic.
The  GBP/USD currency pair today fell from a  high of  1.3067 in  the  early London session to  a  low of  1.3005 midway through the  session before rallying higher and  falling again.
The  currency pair today alternated between gains and  losses as  investors remained worried about the  state of  the  UK economy. The  release of  the  UK preliminary Q2 GDP report by  the  Office for  National Statistics boosted the  pound slightly. The  country’s GDP contracted 20.4%, which was better than the  expected 20.5% decline. The  release of  the  positive manufacturing production and  industrial production reports also boosted the  pair; the  industrial production print rose 9.3% in  June as  compared to  analysts estimates of  9.2%. The  disappointing UK June trade balance data weighed on  the  pair limiting its gains.
The  pair had a  muted reaction to  the  upbeat US consumer price index report for  July, although it later fell. According to  the  Bureau of  Labor Statistics, US headline and  core inflation both rose 0.6% beating analysts estimates by  0.4% and  0.3% respectively.
The  currency pair’s future performance is likely to  be affected by  geopolitical events and  tomorrow’s US jobless claims data.
The GBP/USD currency pair was trading at 1.3027 as at 19:44 GMT, having fallen from a high of 1.3067. The GBP/JPY currency pair was trading at 139.22, having dropped from a high of 139.62.
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