GBP/USD pares gains after weak GDP data, eyes on US CPI

The GBP/USD currency pair edged higher on Wednesday, after Democratic candidate Kamala Harris put contender Donald Trump on the defensive during yesterday’s televised presidential debate.

The British Pound, however, trimmed gains, following a weak set of UK macro data.

Vice President Harris put former President Trump on the defensive in an intense debate on Tuesday, unleashing a cannonade of attacks on abortion limits, his fitness for office as well as his legal issues.

“Harris was seen as winning the debate, leading to a decline in U.S. yields and a weaker dollar as a result,” Shinichiro Kadota, currency strategist at Barclays, was quoted as saying by Reuters.

Meanwhile, on the data front, the UK economy registered zero growth once again in July, according to the latest report by the Office for National Statistics.

Market consensus had pointed to a 0.2% GDP growth.

Services output went up 0.1% in July, but industrial production shrank 0.8% and construction output dropped 0.4%.

In the three months to July, the UK GDP rose 0.5%, mostly supported by services sector growth. That compares with a 0.6% expansion in the prior three-month period.

Investor focus now sets on the key US CPI inflation report that may affect the Fed’s interest rate cut trajectory.

Annual headline consumer inflation probably eased to 2.6% in August, according to market consensus, from 2.9% in July.

Annual core CPI inflation probably steadied at 3.2% in August, which has been the lowest rate since April 2021.

As of 7:57 GMT on Wednesday the GBP/USD currency pair was inching up 0.03% to trade at 1.3083.