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, alongside the trade balance and industrial production, all of which will be published later this session at 0830 GMT.

The United Kingdom GDP is seen decelerating further in April after a 0.1% drop reported in the month of March.

Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 0.2% in April, down from a growth of 0.9% recorded in March. The total industrial production is expected to come in at 0.1% m/m in April as compared to the previous reading of +0.7%.

On an annualized basis, the industrial production for April is expected to have risen 0.5% versus +1.3% previous, while the manufacturing output is also anticipated to have increased 1.3% in the reported month versus +2.6% 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 April vs. £13.650 billion deficit reported in March.

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 fresh impetus to the GBP bears amid looming UK political uncertainty and trade war.

Haresh Menghani, FXStreet’s Analyst notes: “A convincing breakthrough, leading a subsequent slide below the 1.2685-80 region - marking 38.2% Fibo. level of the 1.2559-1.2763 recent corrective bounce, might trigger the resumption of the prior well-established bearish trend. Below the mentioned support, the pair is likely to accelerate the slide towards challenging the 1.2600 handle with some intermediate support near the 61.8% Fibo. level, around the 1.2635 region.”

“On the flip side, any attempted positive move might continue to confront some fresh supply near mid-1.2700s, which if cleared decisively might prompt some near-term short-covering move and lift the pair further towards the 1.2800 mark,” Haresh adds.

Key Notes

UK GDP sees downside risks with a decline of 0.3% m/m in April – TDS

GBP Futures: upside loses steam

EUR/GBP technical analysis: Bears keep lurking around latest highs, rising channel in play

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.