GBP Rebounds as UK Economy Surpasses Forecasts

The British Pound (GBP) rebounded against the US Dollar (USD) on Friday after a brief dip following the release of the latest Consumer Price Index (CPI) report from the United States.

The CPI rose 0.4% month-over-month and 3.4% year-over-year, matching forecasts. However, the market's initial reaction was to strengthen the US Dollar, but most G8 currencies have since recovered.

In contrast, the UK economy grew at its fastest pace in 18 months in July, with a 1.6% year-over-year increase in Gross Domestic Product (GDP), exceeding estimates of 1.2%. This strong growth has led money markets to expect the Bank of England (BoE) to leave interest rates unchanged.

The GBP/USD pair currently trades at 1.3524, with a bullish bias as price stays above technical supports. The Relative Strength Index (14) near 50 suggests neutral momentum, hinting that bulls are defending the floor but lack strong directional conviction.