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A big sigh of relief is felt in the UK. According to the initial release, the British economy grew by 0.2% in Q2, as expected. There was fear of contraction in the . GBP/USD is moving higher..

Pound/dollar is now at 1.64, up around 60 pips on the news. The next significant level of resistance is still far.

Update 9:09 GMT: The pound now loses some ground, sliding back to 1.6375, still above the levels before the publication.

As the figure is close to 0%, and we have two revisions to this first release, the figure can flip to the other side. Q1 saw a growth rate of 0.5%, which isn’t too bad, but only hardly compensated for the contraction seen in Q4.  

Even with this growth and not contraction, a rate hike anytime soon is unlikely. The economy is still sluggish. Current market expectations are for a hike only in one year from now.

Prior to the publication, cable was trading at around 1.6340, after it managed to settle above the 1.6280 – 1.63 level, it was struggling with. The pound enjoyed the fall of the dollar, a result of the debt ceiling crisis in the US.

Most estimates talk about an agreement in the last minute, but currently the gaps are big, the rhetoric is loud and the drop dead date is getting closer.

Levels below are 1.62 and 1.6110. Above we have 1.6470 and 1.6550. For more about GBP/USD, see the British pound forecast.