EUR/GBP retreats towards the 0.8650 area following upbeat UK data

EUR/GBP approaches multi-month lows at 0.8644 on the back of strong UK data.
UK GDP growth beat expectations in November, easing concerns about the budget.
In the Eurozone, the focus is on November's Industrial Production data, due later on Thursday.

Guillermo Alcala FXStreet

The Euro has given up daily gains against a buoyant British Pound, following stronger-than-expected UK Gross Domestic Product figures. The pair has pulled back from session highs near 0.8670 to approach the 0.8650 area, turning negative on the daily chart.

UK Gross Domestic Product (GDP) data revealed that the country's economy grew at a 0.3% pace in November, despite the uncertainty about the government’s budget, following a 0.1% contraction in October. November’s data beat the market’s consensus that had forecasted a softer 0.1% growth.

GDP data has been underpinned by generalised growth across most sectors. Manufacturing production accelerated to 2.1%, following a 0.4% growth in October, and the services sector grew at a 0.2% pace, from 0.1% in the previous month. Construction activity has been the exception with a 1.3% decline.

The Euro, on the other hand, remains vulnerable, leaving the pair unable to take off from the four-month lows at 0.8644, hit last week. shrug off
Later on Thursday, Eurostat will release Eurozone Industrial Production data, which are expected to have increased 0.5% in November, following a 0.8% increase in October. Year-on-year, factory output is expected to grow at a steady 2% rate. The Euro would need a significant surprise to shrug off its bearish momentum.

Economic Indicator

Gross Domestic Product (MoM)

The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.

Economic Indicator

Manufacturing Production (MoM)

The Manufacturing Production released by the National Statistics 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).

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