UK's economy grew at 0.3% in the second quarter as expected by many analysts compared to 0.2% in the first quarter. The sluggish GDP data dampened expectations for the Bank of England to raise interest rates in the coming months. The pound initially fell from 1.3042 to 1.3010 (-32 pips) at the initial reaction to the data. However, the pound managed to climb higher to 1.3060 as the U.S. dollar weakened and short covering into the US open.
In the recent weeks, the pound had risen to its highest levels in 10 months against the US dollar from the many comments from BOE officials which led to speculation of rates would be raised in the near term future.