Pound Falters Against Dollar as Weak Factory Data Erodes Gains

The British Pound (GBP) is trading flat against the US Dollar (USD), hovering just below the key level of 1.3500 on Thursday's early London session.

Despite a strong second quarter Gross Domestic Product (GDP) release, which beat market expectations with a 0.6% pace of growth, the Pound's gains were offset by weak factory output figures.

The UK National Statistics Office reported that industrial production contracted 0.2% in June, exceeding expectations of a 0.1% growth, while manufacturing production shrank at a 0.5% pace.

According to strategists at Scotiabank, the Pound's recent moves are largely sentiment-driven and correlated with risk reversals, with potential resistance near 1.3600 and support in the mid/lower 1.34s.