|

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 and the fourth quarter GDP releases today, alongside the releases of the Kingdom’s Trade Balance and Industrial Production, all of which will drop parallelly later on Tuesday at 0930 GMT.

The United Kingdom GDP is expected to arrive at +0.2% MoM in December while the Index of Services (3M/3M) for December is seen lower at 0.0%.

The first readout of the Q4 GDP is seen weaker at 0.0% QoQ and +0.8% YoY.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to rebound 0.5% MoM in December vs. -1.7% recorded in November. The total industrial production is expected to come in at +0.3% MoM in Dec as compared to the previous reading of -1.2%.

On an annualized basis, the industrial production for Dec is expected to have dropped by 0.8% versus -1.6% previous while the manufacturing output is also anticipated to have declined by 1.0% in the reported month versus -2.0% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £10.00 billion in Dec vs. £5.256 billion deficit reported in Nov.

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 stalls its recovery momentum and turns negative, battling the 1.29 handle, with all eyes on the critical UK macro releases.   

According to FXStreet’s Analyst. Haresh Menghani: “Traders are likely to wait for a sustained weakness below 100-day SMA, around the 1.2895 region, before positioning for any further depreciating move. The pair then might accelerate the slide further towards the 1.2830-25 horizontal support en-route the 1.2800 round-figure mark.”

“On the flip side, the 1.2950-60 region now seems to have emerged as an immediate strong resistance, above which the pair is likely to aim towards reclaiming the key 1.30 psychological mark – representing a short-term ascending trend-line support break-point. Any subsequent recovery is likely to confront some fresh supply and remain capped near the 1.3025-25 resistance zone,” Haresh adds.

Key Notes

UK: Q4 GDP and Carney’s speech in focus – TD Securities

UK GDP Preview: Stagnation may be good enough for pound bulls, three GBP/USD scenarios

UK shoppers still wary about spending in January - BRC

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. 

Author

Dhwani Mehta

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.

More from Dhwani Mehta
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD remains below 1.1750 ahead of ECB policy decision

EUR/USD remains on the back foot below 1.1750 in the European session on Thursday. Traders move to the sidelines and refrain from placing any fresh directional bets on the pair ahead of the ECB policy announcements and the US CPI inflation data. 

GBP/USD ticks north following BoE’s announcement

The Bank of England decided to cut the benchmark interest rate by 25 basis points as expected. The MPC voting was tight, with just 5 out of 9 officials backing the decision. Sterling Pound advances on relief as investors anticipated a more dovish outcome.

Gold holds losses below $4,350 ahead of US CPI report

Gold struggles to capitalize on the previous day's move higher and holds its pullback below $4,350 in the European session on Thursday. The downtick could be attributed to some profit-taking amid a US Dollar bounce. All eyes now remain on the US CPI inflation data. 

US CPI set to grow at stable 3.1% in November, further complicating the Fed’s dilemma

The US Consumer Price Index is forecast to rise 3.1% YoY in November, a mild uptick compared with September. The inflation report will not include monthly CPI figures.

Bitcoin steadies near $87,000 as strong ETF inflows offset bearish pressure

Bitcoin price hovers around $87,000 on Thursday, stabilizing after declining earlier this week. US-listed spot ETFs recorded $457.29 million in inflows on Wednesday, the highest single-day inflows since November 11.

Dogecoin Price Forecast: DOGE breaks key support amid declining investor confidence

Dogecoin (DOGE) trades in the red on Thursday, following a 4% decline on the previous day. The DOGE supply in profit declines as large wallet investors trim their portfolios. Derivatives data shows a surge in bearish positions amid declining retail interest.