Today U.K. will release GDP, trade balance, industrial production as well as manufacturing production data around 0700 GMT/1230 IST. As all the key indicators are releasing jointly, sterling may face volatility. GDP is the broadest measure of economic activity and the primary gauge of the economy’s health. In addition, trade balance data is as important as export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation’s exports. Export demand also impacts production and prices at domestic manufacturers. While production data is a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings.
Let’s see how Sterling has reacted during the previous data release:
GBP/USD: The pound rises noticeably against U.S. dollar and remains well supported around $1.37 mark. Today U.K. will release NIESR GDP estimates too. The pair made intraday high at $1.3697 and low at $1.3674 mark. A sustained close above $1.3684 will drag the parity up towards key resistance around $1.3720, $1.3776 and $1.3809 mark. Alternatively, reversal from this will take the parity down towards $1.3624, $1.3600, $1.3570 and $1.3522 mark respectively.
Take a look and do trade wisely!