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 Thursday, at 06:00 GMT with the monthly release of February 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 an improvement of 0.3% in economic activities during January 2023, market players will be interested in February month’s GDP figures to defy 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 February. GBP/USD traders also await the Index of Services (3M/3M) for the same period, likely to decline to -0.2% versus 0.0% prior, for further insight.

Meanwhile, Manufacturing Production, which makes up around 80% of total industrial production, is expected to improve to 0.2% MoM in February, compared to -0.4% prior. Also, the total Industrial Production may rise by 0.2% versus the 0.3% previous expansion.

Considering the yearly figures, the Industrial Production for February is expected to have dropped by -3.7% YoY versus -4.3% previous while the Manufacturing Production is anticipated to have improved to -4.7% in the reported month versus -5.2% the last.

Separately, the UK Trade Balance; non-EU for February will be reported at the same time and is improve to deteriorate to £-7,243B versus the prior readings of £-7,808B.

How could affect GBP/USD?

GBP/USD struggles to defend the third consecutive profit-making day after bouncing off the one-week low on Tuesday. In doing so, the Cable pair portrays the market’s cautious mood ahead of the key UK data dump, as well as amid a lack of major data/events elsewhere.

The Cable pair’s latest gains could be linked to the US Dollar’s broad-based weakness amid downbeat US inflation and increasing odds of the Federal Reserve’s (Fed) policy pivot after March.

Adding strength to the upside momentum could be the Brexit optimism as US President Joe Biden visit Northern Ireland and has been recently praising the EU-UK deal. Furthermore, hawkish comments from Bank of England (BoE) Governor Andrew Bailey also favor the GBP/USD buyers of late.

That said, a positive surprise from the scheduled British statistics may, however, won’t be enough to keep the GBP/USD firmer amid looming recession woes and likely easing inflation in the UK. Hence, a kneejerk bounce in the Cable price could be witnessed in case of the firmer UK data.

Technically, a daily close below a three-week-old ascending support line, around 1.2390 by the press time, GBP/USD is well set to challenge May 2022 top surrounding 1.2665. 

Key notes

GBP/USD Price Analysis: Eyes more gains above 1.2500 ahead of UK GDP and US PPI 

GBP/USD bulls attack 1.2500 as US inflation, FOMC Minutes signal Fed policy pivot, UK data dump eyed

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.