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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 October, alongside the trade balance and industrial production, all of which will be published later this session at 0930 GMT.

The United Kingdom GDP is expected to arrive at 0.1% m/m in October versus 0.0% previous. Meanwhile, the manufacturing production, which makes up around 80% of total industrial production, is expected to show m/m no growth in October vs. 0.2% seen in September. The total industrial production is expected to come in at 0.1% m/m in Oct as compared to the previous reading of 0.0%.

On an annualized basis, the industrial production for Oct is expected to have dropped 0.2% versus 0.0% previous, while the manufacturing output is anticipated to come in at 0.0% in the reported month versus 0.5% last.

Separately, the UK goods trade balance will be reported at the same time and is expected to show a deficit of £ 10.50 billion in October vs. £ 9.73 billion 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?

An uptick in the UK GDP growth rate could offer the much-needed lift to the GBP bulls, but the upside is likely to be temporary, as markets remain cautious ahead of tomorrow’s parliamentary meaningful vote on the UK PM Theresa May’s Brexit deal.

Haresh Menghani, FXStreet’s Analyst notes: “A convincing breakthrough the mentioned barrier, currently near the 1.2785 region, leading to a sustained move beyond the 1.2800 handle might trigger a short-covering bounce move towards the 1.2835-40 region. A follow-through positive momentum has the potential to continue lifting the pair further toward its next major hurdle near the 1.2880 supply zone. On the flip side, the 1.2700 handle now seems to have emerged as an immediate strong support, which if broken is likely to accelerate the fall back towards challenging yearly lows, around the 1.2660 region, before the pair eventually aims to test the 1.2600 round figure mark.”

Key Notes

Market themes of the Day: The final day of conviction before Brexit vote day

Vote on Tuesday is not the final word in the Brexit saga

GBP/USD Technical Analysis: Holding at 1.2750, but downward pressure continues to mount

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. 

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