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

The UK Economic Data Overview

The British economic calendar is all set to entertain the cable traders during the early hours of Monday, at 07:00 GMT with the monthly release of October 2022 Gross Domestic Product (GDP) figures. Also increasing the importance of that time are Trade Balance and Industrial Production details for the stated period. It’s worth noting that the Bank of England’s (BOE) monetary policy meeting on Thursday amplifies the importance of today’s UK data dump for the GBP/USD pair traders.

Having witnessed a contraction of 0.6% in economic activities during September 2022, market players will be interested in October month’s GDP figures to confirm the fears of an economic slowdown.

Forecasts suggest that the UK GDP will mark stagnation of the British economy with 0.1% MoM figures for October. GBP/USD traders also await the Index of Services (3M/3M) for the same period, likely to deteriorate to -0.1% versus 0.0% prior, for further insight.

Meanwhile, Manufacturing Production, which makes up around 80% of total industrial production, is expected to ease to -0.1% MoM in October. Also, the total Industrial Production may shrink by 0.3% versus 0.2% previous expansion.

Considering the yearly figures, the Industrial Production for October is expected to have dropped to -4.2% versus -3.1% previous while the Manufacturing Production is anticipated to have dropped by -6.3% in the reported month versus -5.8% the last.

Separately, the UK Goods Trade Balance for October will be reported at the same time and is expected to deteriorate to £-11.309B versus the prior readings of £-8.551B.

How could affect GBP/USD?

GBP/USD snaps a three-day uptrend as it holds lower ground near 1.2230 heading into Monday’s London open. The Cable pair’s latest losses could be linked to the US Dollar’s broad-based recovery ahead of the key US inflation data, as well as the Federal Reserve (Fed) monetary policy meeting. Also weighing on the quote could be the recession woes.

It should be observed that the latest headlines suggesting the British manufacturers’ expectations of witnessing 3.2% fall in output during 2023 also exert downside pressure on the GBP/USD price. On the same line are news shared by Reuters suggesting that the UK lenders see 23% slide in mortgages for home-buyers in 2023.

That said, a positive surprise from the scheduled British statistics may, however, could offer only a kneejerk bounce amid broad pessimism surrounding the UK’s economic growth and likely a lesser hawkish outlook over the BOE than the Fed.

Technically, a one-month-old rising wedge bearish chart pattern, currently between 1.2205 and 1.2485, teases the GBP/USD bears.

Key notes

GBP/USD Weekly Forecast: Pound Sterling looks north, gearing up for a critical week

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 a broad measure of the UK's 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 a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the GBP.