The Pound Sterling (GBP) has rebounded against the US Dollar (USD) so far this week ahead of today’s UK election, MUFG FX strategists note.

GBP/USD benefits from the weak US data

“The Cable rose to a Wednesday’s high of 1.2777 after it failed to break below support at the 1.2600-level at the start of this week. GBP/USD benefitted on Wednesday from the release of further disappointing US economic data releases.”

“According to Bloomberg, US economic data surprises have been surprising to the downside relative to expectations since May and it is the worst run of negative economic surprises since the summer of 2022.”

“In contrast, economic data releases have been surprising to the upside in recent months. UK GDP growth in Q1 was revised even higher by 0.1 point to 0.7%Q/Q and the BoE’s staff are expecting stronger growth to continue in Q2 (+0.5%Q/Q).”