Pound Rallies on Strong UK GDP Data and Positive Brexit Headlines

The  British pound today rallied higher against the  US dollar following the  release of  the  UK GDP monthly estimate for  July, which came in  above expectations. The  GBP/USD currency pair’s rally was slowed down by  the  weak manufacturing output print, which indicated that manufacturing activity contracted in  July.
The  GBP/USD currency pair today rallied from a  low of  1.2897 to  a  high of  1.3051 following the latest Brexit headlines released at  the  time of  writing.
The  currency pair was on  a  downtrend during the  Asian session, but rallied higher in  the  early European session following the  release of  the  latest UK GDP growth data by  the  Office for  National Statistics. The  GDP rose by  0.3% in  July, which was higher than the  expected 0.2% print, triggering the  pair’s initial rally. The  UK construction output for  July also beat expectations by  recording a  0.5% gain as  opposed to  the  expected 0.5% contraction. The  pair’s rally was weighed down by  the  unexpected 0.2% contraction in  manufacturing output versus the  expected 0.2% increase. The  industrial production data also came in  below expectations.
The  currency pair exploded higher in  the  early American session after the  EU’s chief Brexit negotiator Michel Barnier said that he sees the  Brexit deal being completed in  6–8 weeks. The  pair exceeded the  highs reached on  Friday after the  EU chief’s announcement of  flexibility in  resolving the  Irish border standoff.
The  pair’s future performance is likely to  be affected by  tomorrow’s UK labour market report and  Brexit developments.
The  GBP/USD currency pair was trading at  1.3033 as  at  13:32 GMT having rallied from a  low of  1.2897. The  GBP/JPY currency pair was trading at  144.79 having risen from a  low of  143.05.

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