GBP Plunges from One-Week High as Diverging Policy Expectations Weaken Sterling

The British Pound (GBP) fell from its one-week high above $1.3300 on Thursday, as traders became cautious due to conflicting fundamental drivers. The GBP/USD pair is currently trading just above the mid-1.3200 area.

The UK's second-quarter GDP growth was revised higher to 0.4%, reinforcing market expectations that the Bank of England will deliver a 25-basis-point interest rate increase at its upcoming policy meeting on November 5.

In contrast, US Personal Consumption Expenditures (PCE) data released on Wednesday has scaled back expectations for a Federal Reserve rate increase in October. This divergence in policy expectations offers some support to GBP/USD, even as broader US Dollar strength limits any sustained upside in the pair.