Pound Surges as UK GDP Beats Expectations Amid Dollar Rally Pause

The Pound gained value on Wednesday as the UK's GDP beat expectations, while the dollar's rally paused ahead of US inflation and jobs data. Sterling rose to $1.3271, up 0.31%, with the euro edging up 0.11% to $1.1354.

The UK's economy grew 0.5% in the second quarter, exceeding forecasts of a 0.4% increase. However, government borrowing rose to 5.2% of GDP from 4.2%. The pound's gain was nearly triple that of the euro, which remains below its 52-week high.

ING FX strategist Francesco Pesole attributed the dollar's pause to rising back-end yields and a slump in long-dated bonds. He expects the Fed to hike interest rates next in December, with October FOMC pricing falling 5 basis points to 12 bps.