Key points:

• Sterling rises, but then falls
• Markets digest UK GDP figures
• US retail sales report coming today

British pound first shot up but then came down as forex bros digested the latest economic news out of the UK.

💪 UK GDP Data Is Strong

• The GBPUSD pair was zig-zagging around the flatline early Thursday after the latest GDP report out of the UK highlighted an interesting trend. The British economy surprised with an expansion on all fronts — monthly, quarterly, and yearly.
• For the year, the UK economy grew 1.3% in the first quarter, compared with the same quarter last year. Analysts were eyeballing growth of 1.2%. But that’s not all.

📈 Fastest Clip in a Year

• Quarter on quarter, it marked growth of 0.7% against 0.6% expected. And month on month, the GDP figure for March knocked it out of the park with a 0.2% growth against 0% expected.
• What’s impressive about these figures is that on the quarterly basis, it’s the fastest clip seen in a year. But there’s also the key detail that the readout covers the quarter right before Trump’s tariff threats upended supply chains and dented the global economic outlook.

📞 Sterling’s Mixed Reaction

• “Today’s growth figures show the strength and potential of the UK economy,” UK chancellor Rachel Reeves said. That strength, however, didn’t translate into gains for the sterling.
• The pound-dollar pair initially shot up to a session high of $1.3304, up some 30 pips from the open, but then crumbled under selling pressure and dived in the red as the session progressed. Economic growth could tilt interest rate expectations toward a cut sooner rather than later.
• Looking ahead, the US retail sales report for April is due today. It is expected to show zero growth on a monthly basis and its release will likely inject fresh volatility not only in the GBPUSD but also across forex trading broadly.

Source: Tradingview