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 for July, alongside the trade balance and industrial production, all of which will be reported at the same time, i.e., at 0830 GMT.

The Kingdom’s GDP is expected to arrive at 0.2% m/m in June versus 0.1% last. Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m growth of 0.2% in July, down from an expansion of 0.4% recorded in June. The total industrial production is expected to come in at 0.2% m/m in July as compared to the previous reading of 0.4%.

On an annualized basis, the industrial production for July is expected to stay unchanged at 1.1% while the manufacturing output is also anticipated to have steadied at 1.1% in the reported month.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £11.750 billion in July vs. £11.383 deficit reported last.

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?

Today's macro releases could be play a second fiddle to the ongoing Brexit-related and trade developments. However, upbeat UK GDP figures could offer a fresh boost to the GBP bulls, driving the pair back towards the 1.3000 psychological levels.  

Haresh Menghani, FXStreet’s Analyst notes: “A subsequent slide further below the 1.2900 handle now seems to accelerate the downfall towards 1.2850 intermediate support en-route the 1.2800 round figure mark. A follow-through selling would reinforce a well-established bearish trend and turn the pair vulnerable to head back towards challenging the 1.2700 handle. On the flip side, the mentioned confluence area, currently near the 1.2990-1.3000 region, might continue to act as an immediate strong resistance and is followed by the 1.3025-30 supply zone.”

Key Notes

UK: Focus on monthly GDP report – TDS

GBP/USD Technical Analysis: Sterling bracing for UK GDP

Market themes of the Day: UK manufacturing and monthly GDP headline Monday

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 the trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the GBP.