GBP remains firm on positive data surprises - Scotiabank

Pound Sterling (GBP) remains well-supported in the upper 1.35s following this morning's slew of UK data releases, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

GBP holds range on the day

"June and Q2 GDP data were broadly stronger than expected (+0.4% and +0.3% respectively). The data reflected stronger than forecast activity across manufacturing and services while construction gains conformed to expectations."

"Government spending helped lift growth but the UK was the top-performing economy in the G7 in H1, according to Bloomberg, with a 1.1% rise. That's nearly double the US economy's 0.6% gain. The data doused BoE easing expectations over the balance of the year a little further."

"Sterling is firm and testing resistance at 1.3590 (late July high). A solid trend higher from the August 1 low, backed by strong bull trend momentum on the 6-hour candle chart. A push higher through 1.3590 targets additional gains to 1.3635/45 and should put the pound on track to retest the July 1 high at 1.3790. Support is 1.3530/40."