When are the UK data releases and how could they affect GBP/USD?

The UK Economic Data Overview

The UK docket has the monthly release this Friday, alongside the releases of the Kingdom’s Trade Balance and Industrial Production, all of which will drop parallelly at 0700 GMT.

The United Kingdom GDP is expected to arrive at -5.7% MoM in November while the Index of Services (3M/3M) for November is seen lower at 7.5%.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to rise 0.9% MoM in November vs. +1.7% recorded in October. The total industrial production is expected to come in at +0.5% MoM in Dec as compared to the previous reading of +1.3%.

On an annualized basis, the industrial production for Nov is expected to have dropped by 4.2% versus -5.5% previous while the manufacturing output is also anticipated to have declined by 4.8% in the reported month versus -7.1% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £10.175 billion in Nov vs. £11.999 billion deficit reported last.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined around 20-pips in deviations up to + or -2, although in some cases, if notable enough, a deviation can fuel movements in excess of 60-70 pips.

How could affect GBP/USD?

At the press time, the GBP/USD pair is consolidating in a narrow range below 1.3700, with all eyes on the critical UK macro releases.   

According to FXStreet’s Chief Analyst. Valeria Bednarik, “the GBP/USD pair trades between 1.3650 and 1.3700. It is about to post the highest daily close in years, but it does not show yet strong signs of a break above 1.3700. On Thursday, the rebound gave the pound the needed momentum for a new test of the 1.3700/20 barrier. A consolidation above could trigger volatility and more gains. The positive tone will last while above 1.3610/20 (Dec 13 and 14 low). A slide below would target 1.3585 first, in a move that could extend to the 1.3545 support area. Support levels: 1.3620 1.3545 1.3470. Resistance levels: 1.3710 1.3755 1.3755 1.3820.”

Key Notes

GBP/USD under pressure below 1.3700 ahead of key UK data

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About the UK Economic Data

The Gross Domestic Product released by the Office for National Statistics (ONS) is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. Generally speaking, a rising trend has a positive effect on the GBP, while a falling trend is seen as negative (or bearish).

The Manufacturing Production released by the Office for National Statistics (ONS) measures the manufacturing output. Manufacturing Production is significant as a short-term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. A high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or bearish).

The trade balance released by the Office for National Statistics (ONS) is a balance between exports and imports of goods. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the GBP.