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 Friday, at 07:00 GMT with the monthly release of January 2023 Gross Domestic Product (GDP) figures. Also increasing the importance of that time are Trade Balance and Industrial Production details for the stated period.

Having witnessed a contraction of 0.5% in economic activities during December 2022, market players will be interested in January 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 January. GBP/USD traders also await the Index of Services (3M/3M) for the same period, likely to improve 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 January. Also, the total Industrial Production may shrink by 0.2% versus the 0.3% previous expansion.

Considering the yearly figures, the Industrial Production for January is expected to have dropped to -4.0% versus -4.0% previous while the Manufacturing Production is anticipated to have improved to -5.0% in the reported month versus -5.7% the last.

Separately, the UK Goods Trade Balance for October will be reported at the same time and is expected to deteriorate to £-7,966B versus the prior readings of £-7,484B.

How could affect GBP/USD?

GBP/USD struggles to defend the third consecutive profit-making day after bouncing off the lowest levels since November 2022 on Tuesday. In doing so, the Cable pair portrays the market’s cautious mood ahead of the key UK data dump, as well as the US employment report.

The Cable pair’s latest gains could be linked to the US Dollar’s broad-based retreat ahead of the key US Nonfarm Payrolls (NFP) data. Also favoring the Cable buyers could be the Brexit optimism, as well as the UK policymakers’ readiness to easy equity market listing rules to defend London’s financial status.

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. It should be noted that the looming US jobs report for February also prods the GBP/USD traders.

Technically, GBP/USD managed to regain its place above the 200-DMA level of 1.1900, after a two-day absence, which in turn keeps buyers hopeful.

Key notes

GBP/USD grinds higher past 1.1900 ahead of UK data dump, US NFP 

GBP/USD Forecast: Pound Sterling remains fragile despite technical correction

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.