GBP Rebounds from Two-Month Low on UK GDP Revision and Hawkish Fed Bets
The British Pound has recovered some ground after a two-month low on Wednesday due to a combination of supporting factors, including an upward revision of the UK's Q2 GDP and rising bets for a Bank of England (BoE) rate hike.
According to the Office for National Statistics, the UK economy grew by 0.5% in the second quarter of 2026, which is an upward revision from the initial estimate of 0.4%. This data has reinforced market expectations for a 25-basis-point (bps) rate hike by the BoE at its upcoming meeting on November 5.
The US Dollar (USD) has also come under pressure due to retreating US bond yields and dovish remarks from New York Federal Reserve President John Williams, who stated that the central bank need not rush its next move. Additionally, a decline in crude oil prices to a three-week low has further weighed on the USD.
However, hawkish Fed expectations could limit deeper USD losses, as traders are still pricing in over a 90% chance of another rate hike by the end of this year, according to CME Group's FedWatch Tool. Furthermore, persistent geopolitical uncertainties may continue to underpin the safe-haven Greenback.
The GBP/USD pair has moved away from its two-month low around 1.3200 and is currently trading at the 1.3260 area, but any subsequent move up is likely to face stiff resistance ahead of the 1.3300 mark. A sustained break above this level might trigger a short-covering rally and pave the way for further gains.