The British Pound (GBP) is trading slightly firmer against the US Dollar (USD), with a fractional 0.1% gain as it enters Wednesday’s North American session, according to Scotiabank strategists Shaun Osborne and Eric Theoret [1]. The latest data shows modest improvements in the final services and composite PMIs for July, indicating marginal growth overall [1]. However, the fundamental backdrop for the GBP has weakened since mid-July, as 2-year spreads have given back much of their recovery from late June [1].
With the economic calendar relatively quiet ahead of the preliminary Q2 GDP print scheduled for August 13, market participants are focusing on the current trading range. Scotiabank expects GBP/USD to remain range-bound between 1.3420 and 1.3520 in the near term, within a broader range of 1.31 to 1.35 [1]. The options market is providing some reassurance, which likely reflects improved sentiment towards the UK’s political situation [1].
Technical indicators show a neutral to bullish stance, with the RSI slightly above the neutral threshold at 50, suggesting the pound has found firmer footing following last week’s gains [1]. Despite the fading fundamental picture, Scotiabank maintains a medium-term bullish outlook for the GBP [1].
CONCLUSION
The British Pound is holding steady in a defined range ahead of the Q2 GDP release, with technicals and sentiment indicators supporting a medium-term bullish view. Market impact is currently low, as traders await more significant economic data to drive direction.