The British pound (GBP) traded higher against other major currencies, except for the Antipodean currencies, on Wednesday. The British currency showed strength as market sentiment remained optimistic amid strong expectations that the Federal Reserve (Fed) will cut interest rates next week.

On the domestic data front, investors are awaiting UK Gross Domestic Product (GDP) and factory data for July, scheduled for Friday. Monthly GDP growth in the UK economy is expected to stagnate after rising by 0.4% in June. Monthly Manufacturing and Industrial Production data are also expected to remain flat.

Signs of slowing UK GDP growth will boost market expectations for further interest rate cuts by the Bank of England (BoE) for the remainder of the year. Meanwhile, traders expect the BoE to keep interest rates unchanged at 4% at its monetary policy meeting next week.

Meanwhile, the US dollar traded subdued as investors digested signs of weakness in the US labor market, highlighted by the revised benchmark Nonfarm Payrolls (NFP) report released on Tuesday. The report for the 12 months ending March 2025 showed that the economy created 911,000 fewer jobs than previously anticipated. (alg)

Source: FXstreet