UK Manufacturing Production rebounds 0.3% MoM in Dec vs. +0.5% expected

Dhwani Mehta FXStreet

The Office for National Statistics (ONS) published the UK industrial and manufacturing production data on Tuesday, with the overall industrial activity sinking further into contraction in December.

Manufacturing output arrived at +0.3% MoM in December versus +0.5% expectations and -1.6% booked in December, while total industrial output came in at +0.1% vs. +0.3% expected and -1.1% last.

On an annualized basis, the UK manufacturing production figures came in at -2.5% in December, missing expectations of -1.0%. Total industrial output dropped by 1.8% in December, against a -0.8% reading expected and the previous -1.6% print.

Separately, the UK goods trade balance numbers were published, which arrived at GBP 0.845 billion in Dec, versus GBP -10.00 billion expectations and GBP -4.947 billion last. Total trade balance (non-EU) came in at GBP 6.721 billion in Dec versus GBP 2.364 billion previous.

FX Implications

The GBP/USD pair shows little reaction to the mixed UK growth and industrial numbers. The spot holds on to the previous gains around 1.2930, having reached daily highs at 1.2942 pre-data release.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD flatlines below 0.7050 as bulls await RBA rate decision on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY advances to 157.75 as BoJ uncertainty weighs on the JPY

USD/JPY regains positive traction during the Asians session on Monday, building on Friday's bounce from sub-157.00 levels as the uncertainty over the timing of the next BoJ rate hike undermines the Japanese Yen. Meanwhile, hopes for Middle East diplomacy cap the safe-haven US Dollar and the currency pair amid speculation that authorities will step in to support the Japanese Yen.

Gold struggles to build on recovery from one-year low beyond $3,900

Gold kicks off the week on a positive note, recovering slightly from its lowest level since October 2025, touched on Friday, as hopes for Iran diplomacy cap the US Dollar. However, Fed rate-hike bets keep a lid on the non-yielding bullion as focus shifts to key US macro releases scheduled at the start of the new month, including the ISM Manufacturing later today and the NFP report on Friday.

Week ahead: Nonfarm Payrolls and US midterm elections take center stage

The US dollar traded higher against most of its peers this week, beginning the week on a solid footing amid expectations of a hawkish FOMC decision on Wednesday. Although market participants were convinced that a rate hike was off the table, they were on the lookout for clues and hints on whether they were correct in nearly fully pricing in a 25bps rate hike in December.

Middle East War updates: Iran warns of expanded strikes against US despite progress in talks

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.