Pound Rises Slightly After U.K. Q2 GDP Expands

(RTTNews) - The British pound strengthened slightly against other major currencies in the European session on Thursday, after the U.K. economy expanded again in the second quarter but the pace of growth moderated slightly due to the contractions in industrial and construction output.

Data from the Office for National Statistics showed that the real gross domestic product grew 0.6 percent in the three months to June, following the 0.7 percent expansion seen in the first quarter. Growth came in line with expectations.

The quarterly growth was driven by the widespread improvement in the services sector. In the second quarter, services output moved up 0.8 percent while, industrial and construction output dropped 0.1 percent each.

On a yearly basis, the economy expanded 0.9 percent in the second quarter as expected.

The European stock markets traded higher, as signs of slowing inflation in the U.S. bolstered the case for the Federal Reserve to start cutting interest rates in September.

Investors shrugged off mixed economic activity data from China and eyed U.S. reports on weekly jobless claims, retail sales and industrial production later in the day for more insights about the health of the world's largest economy.

In the European trading today, the pound rose to 0.8564 against the euro and 1.2858 against the U.S. dollar, from early lows of 0.8589 and 1.2820, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.83 against the euro and 1.29 against the greenback.

Against the yen and the Swiss franc, the pound edged up to 189.33 and 1.1131 from early lows of 188.76 and 1.1092, respectively. The GBP/JPY and GBP/CHF pairs may test resistance around 190.00 and 1.14 regions respectively.

Looking ahead, the National Institute of Economic and Social Research releases U.K. monthly GDP tracker for July at 8.00 am ET.

In the New York session, Canada wholesale sales data for June, U.S. retail sales for July, U.S. weekly jobless claims, U.S. Philadelphia Fed manufacturing index for August, import and export price indices for July, U.S. New York Empire state manufacturing index for August and U.S. industrial and manufacturing production for July, U.S. business inventories for June and U.S. NAHB housing market index are slated for release.