Pound Firms On Better Than Expected U.K. GDP Data

The pound spiked up against its major counterparts in the European session on Monday, as a data showed that nation's economy expanded more than estimated in July, reducing fears over a recession in the U.K.

Figures from the Office for National Statistics showed that gross domestic product expanded 0.3 percent in July after staying flat in June. Economists had forecast marginal growth of 0.1 percent.

GDP was flat in the three months to July from the previous three months, following a contraction of 0.2 percent in the second quarter.

Another report from ONS showed that the visible trade deficit widened to GBP 9.14 billion from GBP 8.9 billion in June. Trade in services showed a surplus of GBP 8.9 billion compared to a GBP 8.78 billion surplus a month ago.

The total trade balance showed a shortfall of GBP 219 million compared to a deficit of GBP 132 million in June.

European stocks were trading mixed after data showed that China's exports fell unexpectedly in August amid escalating trade dispute with the U.S. administration.

Hopes of further stimulus from global central banks helped to limit the downside to some extent ahead of a European Central Bank meeting slated for Thursday.

The currency held steady against its major counterparts in the previous session, excepting the euro.

The pound strengthened to 1.2320 against the greenback, from a 4-day low of 1.2233 hit at 3:15 am ET. On the upside, 1.27 is likely seen as the next resistance level for the pound.

After a 4-day decline to 130.81 at 3:15 am ET, the pound reversed direction, touching as high as 131.80 against the yen. The pound is likely to find resistance around the 134.00 level, should it rises further.

The pound firmed to 1.2229 against the franc, its highest since July 29. This followed a 4-day low of 1.2109 it recorded at 3:15 am ET. The next possible resistance for the pound is seen around the 1.25 level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's jobless rate remained stable in August.

The unemployment rate remained unchanged at seasonally adjusted 2.3 percent in August. On an unadjusted basis, the jobless rate held steady at 2.1 percent.

The pound climbed to a 1-1/2-month high of 0.8936 against the euro, after falling to a 4-day low of 0.9015 at 3:15 am ET. The pound is poised to find resistance around the 0.88 level.

Data from Destatis showed that Germany's exports increased in July, while imports decreased from the previous month.

Exports advanced 0.7 percent month-on-month in July, reversing a 0.1 percent fall in June. Meanwhile, imports dropped 1.5 percent after rising 0.7 percent a month ago.

Looking ahead, U.S. consumer credit for July is scheduled for release in the New York session.