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 trading during the dull hours of early Friday, at 06:00 GMT with August month’s GDP figures for 2020. Also increasing the importance of that time are Trade Balance and Industrial Production details for the stated period.

Having witnessed over 20% contraction of economic activities in the second quarter (Q2), market players will be interested in the GDP figures for the second month of the third quarter (Q3).

Forecasts suggest that the UK GDP will ease to 4.6%% MoM in August versus +6.6% prior while the Index of Services (3M/3M) for the same period is seen recovered from -8.1% to -4%.

Meanwhile, the Manufacturing Production, which makes up around 80% of total industrial production, is expected to rise 3% MoM in August against 6.3% recorded in July. Further, the total Industrial Production is expected to come in at +2.5% MoM as compared to the previous reading of +5.2%.

Considering the yearly figures, the Industrial Production for August is expected to have dropped by 4.6% versus -7.8% previous while the Manufacturing Production is also anticipated to have declined by 5.9% in the reported month versus -9.4% last.

Separately, the UK Goods Trade Balance will be reported at the same time and is expected to show a deficit of £9.0 billion versus an £8.6 billion deficit reported in July.

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?

At the press time of pre-London open on Friday, GBP/USD eases from the intraday high of 1.2959 despite flashing a three-day winning streak. The pair recently picked up bids mainly due to the US dollar (USD) weakness. The reason could be traced from continuous Brexit drama and fears of stringent local lockdowns in the UK. The USD seems to bear the burden of stimulus hopes.

Although markets have been paying comparatively more attention to the US coronavirus (COVID-19) aid package headlines, the GBP/USD pair seems doubtful of its recovery moves considering the Brexit woes. As a result, any disappointment from the figures may take the opportunity to recall the sellers below the 1.3000 threshold.

Technically, highs marked since the mid-September highlight 1.3010 as an extra upside barrier beyond the 1.3000 round-figure. On the contrary, fresh selling may catch a breather around 21-day SMA near 1.2870.

Key notes

GBP/USD consolidates recent gains below 1.3000, eyes UK data dump

GBP/USD Forecast: Bullish tone could improve above 1.3000

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.