SINGAPORE, Aug 15 Reuters The pound nudged higher on Thursday after solid British GDP data, and the euro held above 1.10, near the previous day39;s over sevenmonth top, underpinned by data showing slowing U.S. inflation which reinforced expectations of a Fed rate cut next month.

Markets were calmer after recent ructions but the pound was up 0.2 on the dollar at 1.2856 after data showed Britain39;s economy grew 0.6 in the second quarter of 2024, in line with economists39; expectations and building on a rapid 0.7 recovery in the first quarter of the year.

The pound also strengthened on the euro which dipped 0.2 to 85.66 pence.

The European common currency was steady on the dollar at 1.10090, it reached 1.10475, its highest level this year on Wednesday, as markets tried to digest U.S. inflation numbers.

Those showed the consumer price index rose moderately, in line with expectations, and the annual increase in inflation slowed to below 3 for the first time since early 2021.

The figures add to the mild increase in producer prices in July in suggesting that inflation is on a downward trend, although traders are now anticipating the Fed to be not as aggressive on rate cuts as they had hoped.

The next data point is U.S. retail sales due at 1230 GMT on Thursday.

Monetary easing is certainly getting closer, but the market is framing that in the context of what we saw at the beginning of last week when there was a huge move in expectations for the Fed, said Jane Foley, head…