When are UK data releases and how could they affect GBP/USD?

When are UK data releases and how could they affect GBP/USD?

UK Economic Data Overview

The UK industrial production and trade balance data for the month of August are scheduled for release at 08.30 GMT in the European session ahead.

The manufacturing production, which makes up around 80% of total industrial production, is expected to slow its pace of expansion on monthly basis in Aug, against a 0.5% expansion seen in July. Meanwhile, the total industrial production is expected to remain unchanged at 0.2% m/m in Aug.

On annualized basis, the manufacturing output figures are expected to remain steady at 1.9% for August, while the industrial production is expected to increase by 0.8% vs. 0.4% last.

Separately, the UK goods trade balance is expected to come in at GBP -11.20 billion in Aug vs. GBP -11.58 billion last, while the construction output is expected to show no growth, but would rise from -0.9% seen previously.

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 between 20 and 35 pips in deviations up to 1.5 to -2.2, although in some cases, if notable enough, a deviation can fuel movements of up to 60 pips.

How could affect GBP/USD?

The UK releases are likely to have a significant impact on the GBP markets, as they queue up for the first batch of relevant macro news from the UK docket this week.

Better-than expected data could provide fresh impetus to the GBP bulls, which could drive the rate back above 1.3200 levels, beyond which a test of 1.3251 (Oct 5 high) remains imminent. However, GBP/USD could drop further to test 1.3130 support, should all the indicators disappoint or fail to impress the markets.

Key notes

UK: Manufacturing production to post -0.3% decline in August - TDS

UK industrial production – Danske    

About UK manufacturing production and trade balance

The Manufacturing Production released by the National Statistics 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 National Statistics 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.