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

The UK Economic Data Overview

The UK docket has the monthly GDP release today for October, alongside the trade balance and industrial production, all of which will be released at once at 0930 GMT.

The United Kingdom GDP is expected to arrive at 0.1% m/m in November versus 0.1% previous. Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m 0.3% growth in November vs. -0.9% seen in October. The total industrial production is expected to come in at 0.2% m/m in Nov as compared to the previous reading of -0.6%.

On an annualized basis, the industrial production for Nov is expected to have dropped 0.7% versus -0.8% previous, while the manufacturing output is anticipated to come in at -0.7% in the reported month versus -1.0% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £ 11.400 billion in November vs. £ 11.873 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?

An uptick in the UK GDP growth rate could offer the much-needed lift to the bulls, as expectations of a delay in Article 50 is likely to keep the buoyant tone intact around the pound.

Haresh Menghani, FXStreet’s Analyst notes: “From a technical perspective, the recent range-bound price action points to indecision over the near-term direction. Hence, it would be prudent to wait for a convincing breakthrough the mentioned range before traders start positioning aggressively for the next leg of a directional move. On a sustained move beyond the 1.2800-1.2810 region might increase the prospects for an extension of the positive momentum further towards 100-day SMA, around the 1.2895-1.2900 region.  Alternatively, a convincing break below the trading range support, around the 1.2710-1.2700 region might turn the pair vulnerable to head back towards testing the 1.2600 round figure mark with some intermediate support near the 1.2640-35 region.” 

Key Notes

Market themes of the Day: UK manufacturing and US inflation set to headline

UK: GDP likely to decline 0.2% in November - TDS

GBP futures: consolidative near term

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 the trade deficit. It is an event that generates some volatility for the GBP. 

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