The UK Economic Data Overview

The British economic calendar is all set to entertain the cable traders in early Friday, at 06:00 GMT, with the preliminary GDP figures for Q2 2022. Also increasing the importance of that time are monthly GDP figures for March, Trade Balance, Manufacturing Production, and Industrial Production details for the stated period.

Having witnessed an 8.7% YoY jump in economic activities during the previous quarter, market players might not get delighted with the first estimation of the Q1 GDP figures, expected 2.8% YoY, as it is insufficient to back the BOE’s rate hikes. More interestingly, the QoQ figures are expected to display a de-growth of 0.2% against the expansion of 0.3%.

On the other hand, the GBP/USD traders also eye the Index of Services (3M/3M) for the same period, bearing forecasts of 0.9% versus 0.1% prior, for further insight.

Meanwhile, Manufacturing Production, which makes up around 80% of total industrial production, is expected to contract to 1.8% MoM in June versus 1.4% in May. Further, the total Industrial Production is also expecting a contraction of 1.3% against a positive reading of 0.9% MoM.

Considering the yearly figures, the Industrial Production for June is expected to improve to 1.6% versus 1.4% previous whereas the Manufacturing Production is anticipated to have weakened to 0.9% in the reported month versus 2.3% last.

Separately, the UK Goods Trade Balance will be reported at the same time and is expected to show a deficit of £22.3 billion versus a £21.44 billion deficit reported in the last month.

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 over 30-40 pips.

How could affect GBP/USD?

GBP/USD is hovering around the immediate hurdle of 1.2200 after a modest rebound from 1.2185. The asset defended Wednesday’s low at around 1.2180 but is now displaying a torpid rebound, which could be fragilized effortlessly by the market participants.

Cable’s upside momentum is backed by a significant decline in the US dollar index (DXY). After displaying a downward print in the US Consumer Price Index (CPI), a sense of optimism in the FX domain that the Federal Reserve (Fed) won’t hike rates now vigorously underpinned the risk-sensitive assets.

However, any headline over UK’s political domain could bring wild swings in the GBP/USD pair. The pound bulls still fear the UK’s political instability. After the resignation of UK PM Boris Johnson, a sense of high volatility is engaged with the sterling.

Apart from that, an underperformance by the UK economic data will create more troubles for the Bank of England (BOE). The central bank is already stuck in the laborious job of dealing with ramping up inflation and over that, a slump in growth rates will restrict the BOE to combat price pressures with full power.

The UK households are forced to higher payouts due to ramping inflation and subdued Average Hourly Earnings, which is hurting their sentiment and the overall demand. Over that, the release of weak GDP data will cripple the pound bulls.

While considering this, FXStreet’s  Anil Panchal said,

The BOE has already revealed its grim outlook and hence today's UK GDP are less likely to surprise the markets even after avoiding technical recession.

Key Notes

GBP/USD slides below 1.2200 with eyes on UK GDP, US Michigan Consumer Sentiment Index

GBP/USD struggles around 1.2200 ahead of UK GDP data

GBP/USD retraces from weekly highs, approaches 1.2200

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.

 

 

 

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD stabilizes near 1.0850 following NFP-inspired selloff

EUR/USD came under strong bearish pressure and declined below 1.0850 as the US Dollar gathered strength on the impressive January jobs report. With Wall Street's main indexes rebounding from daily lows, however, the pair seems to have found support.

EUR/USD News

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD falls to 1.2100, looks to post large weekly losses

GBP/USD turned south and fell toward 1.2100 after the data from the US revealed that Nonfarm Payrolls increased by 517,000 in January. Although the US Dollar Index retreated modestly in the late American session, the pair remains on track to close the week deep in the red.

GBP/USD News

Gold extends slide to fresh mutliweek lows below $1,870

Gold extends slide to fresh mutliweek lows below $1,870

Gold price extended its slide after breaking below $1,900 and touched its lowest level since January 10 below $1,870. With the US January jobs report showing an impressive 517,000 growth in NFP, the benchmark 10-year US Treasury bond yield recovered above 3.5%, weighing heavily on XAU/USD.

Gold News

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

Assessing the possibility of Bitcoin price crash to $20,000 after US NFP rises to 517,000

The United States unemployment rate for January came in at 3.4% which is lower than forecast of 3.6%. The NFP data shows that 517,000 jobs were added in January, which is much higher than the expected 185,000.

Read more

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon Stock Earnings: AMZN sags 5% on AWS revenue miss

Amazon stock fell 5.1% afterhours on Thursday as the premier online retailer missed EPS overall for the quarter ending in December and saw growth in its cloud division drop to 20%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures