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

The UK Economic Data Overview

The UK docket has the monthly and the first quarter GDP releases today, alongside the trade balance and industrial production, all of which will be published later this session at 0830 GMT.

The United Kingdom GDP is expected to arrive at 0.5% m/m in March while the first readout of the Q1 GDP is seen at 0.5% q/q and 1.8% y/y.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 0.2% in March, down from a growth of 0.9% recorded in February. The total industrial production is expected to come in at 0.1% m/m in Mar as compared to the previous reading of +0.6%.

On an annualized basis, the industrial production for Mar is expected to have risen 0.5% versus +0.1% previous, while the manufacturing output is also anticipated to have increased 1.3% in the reported month versus +0.6% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £13.800 billion in Dec vs. £14.110 billion deficit reported in February.

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?

The downbeat UK GDP figures could offer extra zest to the GBP bears, as Brexit uncertainty and US-China trade jitters loom.

Haresh Menghani, FXStreet’s Analyst notes: “From a technical perspective, the pair has been showing some resilience below 38.2% Fibonacci retracement level of the 1.2396-1.3381 upswing. Hence, it would be prudent to wait for a sustained break below 200-day SMA before confirming that a near-term top has already been formed and positioning for any further near-term depreciating move. Below the mentioned support near the 1.2970-60 region, the pair is likely to accelerate the slide further towards the 1.2900-1.2890 zone - support marked by 50% Fibonacci retracement level.” 

“On the flip side, the 1.3030-35 region might continue to act as an immediate resistance, above which the pair is likely to make a fresh attempt towards reclaiming the 1.3100 round figure mark. A follow-through buying has the potential to lift the pair back towards the recent swing high, around the 1.3175-80 region – coinciding with 23.6% Fibonacci retracement level,” Haresh adds.

Key Notes

UK: Focus on GDP data - TDS

UK GDP and US CPI amongst market movers today – Danske Bank

EUR/GBP technical analysis: Buyers aim for 0.8660 but overbought RSI hinders the path

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.