BRUSSELS (dpa-AFX) - The British pound strengthened against other major currencies in the European session on Thursday, after the UK economy expanded slightly as expected in August on the back of the production sector.
Data from the Office for National Statistics showed that the real gross domestic product advanced 0.1 percent month-on-month in August, reversing a revised 0.1 percent decline in July.
Total production in the industrial sector grew 0.4 percent compared to July, while services activity remained flat and the construction sector contracted 0.3 percent.
The annual growth in GDP eased to 1.3 percent in August from 1.5 percent in the prior month.
In the three months to August, real GDP advanced 0.3 percent, following a 0.2 percent rise in the three months to July. The service sector was the main contributor to real growth, by 0.4 percent, closely followed by construction output with an increase of 0.3 percent. Meanwhile, industrial production was 0.3 percent lower.
Meanwhile, investors weighed renewed tensions in the U.S.-China trade dispute over rare earth controls against growing expectations of imminent U.S. Federal Reserve rate cuts.
According to the International Monetary Fund, the U.K. economy is expected to grow at the second-fastest rate among the G7 countries in 2025, behind the United States. The IMF offered an upgraded 2026 growth forecast of 1.3 percent for the UK, which is not enough to avoid the need for tax increases in the November budget.
In the European trading today, the pound rose to a 9-day high of 1.3443 against the U.S. dollar, from an early low of 201.99. On the upside, 1.36 is seen as the next resistance level for the pound.
Against the yen, the Swiss franc and the euro, the pound advanced to 2-day highs of 203.44, 1.0709 and 0.8672 from early lows of 201.99, 1.0660 and 0.8695, respectively. If the pound extends its uptrend, it is likely to find resistance around 205.00 against the yen, 1.08 against the franc and 0.85 against the euro.
Looking ahead, Canada CFIB business barometer data for October and UK NIESR monthly GDP tracker for September are slated for release at 7:00 am ET.
In the New York session, Canada housing starts data for September, U.S. Philadelphia Fed manufacturing index for October, U.S. NAHB housing market index for October and U.S. EIA crude oil data are set to be published.
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