The GBP/USD exchange rate surged on Tuesday, rising by approximately 0.5%, as economic data from both the United Kingdom and the United States provided support for the Pound Sterling.
UK labor market figures delivered a positive surprise, with the number of new claimants for unemployment benefits dropping by 6.2K, well below the expected rise of 20.8K. In contrast, average earnings growth moderated more than anticipated, helping to ease inflationary pressures. Across the Atlantic, US Consumer Price Index (CPI) data for July showed little improvement, yet remained sufficiently subdued to maintain expectations of a potential interest rate cut by the Federal Reserve in September.
Looking ahead, Wednesday’s economic calendar is light, with no major releases scheduled. However, Thursday will see another round of key UK and US data. UK Gross Domestic Product (GDP) figures are expected to show a slowdown in the second quarter, with growth forecast to decelerate to just 0.1% quarter-on-quarter, lowering the annualized rate to 1.0% from 1.3%.
On the US side, the main focus will be the release of the Producer Price Index (PPI) inflation data, with an annual rise expected to accelerate to 2.9% from 2.6%. Weekly Initial Jobless Claims data will also be published, though these figures are likely to take a backseat to the PPI release.
