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 dull hours of early Friday, at 07:00 GMT with October GDP figures for 2021. Also increasing the importance of that time are Trade Balance and Industrial Production details for the stated period.

Having witnessed a 0.6% run-up of economic activities in the previous month, market players will be interested in October’s monthly GDP figures to confirm the economic transition amid Omicron fears and fresh activity restrictions.

Forecasts suggest that the UK GDP will ease to 0.4% MoM in May versus +0.6% prior. GBP/USD traders also await the Index of Services (3M/3M) for the same period, +1.6% prior, for further insight.

Meanwhile, Manufacturing Production, which makes up around 80% of total industrial production, is expected to recover from -0.1% to +0.0% MoM in October. However, the total Industrial Production is expected to recover from -0.4% MoM to +0.1%.

Considering the yearly figures, the Industrial Production for October is expected to have eased to +2.2% versus +2.9% previous while the Manufacturing Production is also anticipated to have dropped to 1.7% in the reported month versus 2.8% last.

Separately, the UK Goods Trade Balance will be reported at the same time and is expected to show a deficit of £14.059 billion versus a £14.736 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 over 60-70 pips.

How could affect GBP/USD?

GBP/USD struggles for clear direction near the yearly low, defending 1.3200 level by the press time. The cable pair’s latest weakness could be linked to the latest fears that the Brexit-led economic woes will join the latest lockdown measures to push the Bank of England (BOE) further back from the rate hikes. The same contrasts to the escalating hawkish concerns over the Fed’s next step to exert additional downside pressure on the cable pair. However, the market’s wait for the US Consumer Price Index (CPI) data restricts the recent moves of the pair.

That said, today’s UK data dump may not offer much entertainment to the GBP/USD traders as US inflation gains major attention. Even so, softer data may not hesitate from dragging the quote towards a fresh yearly low.

Ahead of the release, TD Securities said,

Technically, GBP/USD bears remain hopeful as a downward sloping trend line from October 28 restricts immediate upside around 1.3230.

Key notes

GBP/USD: Brexit, coronavirus tests rebound above 1.3200, UK GDP, US inflation eyed 

GBP/USD Price Analysis: Bears looking for a discount and a break below 1.3205

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.