UK GDP rises by 0.3% MoM in November vs. 0.1% expected

Market reaction to the UK data

At the press time, the GBP/USD pair is gaining 0.03% on the day to trade at 1.3436.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.08%	-0.03%	0.00%	0.11%	0.03%	0.14%	0.07%
EUR	-0.08%		-0.11%	-0.09%	0.03%	-0.05%	0.06%	-0.01%
GBP	0.03%	0.11%		0.02%	0.14%	0.06%	0.17%	0.09%
JPY	0.00%	0.09%	-0.02%		0.10%	0.03%	0.11%	0.07%
CAD	-0.11%	-0.03%	-0.14%	-0.10%		-0.07%	0.03%	-0.05%
AUD	-0.03%	0.05%	-0.06%	-0.03%	0.07%		0.11%	0.03%
NZD	-0.14%	-0.06%	-0.17%	-0.11%	-0.03%	-0.11%		-0.08%
CHF	-0.07%	0.01%	-0.09%	-0.07%	0.05%	-0.03%	0.08%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

This section below was published at 5:05 GMT on Thursday as a preview of the UK GDP and Industrial data releases.

UK GDP, Industrial Production Data Overview

The United Kingdom (UK) docket has the Gross Domestic Product (GDP) and Industrial Production data for November to be released by the Office for National Statistics (ONS) on Thursday, later this session at 07:00 GMT.

UK Gross Domestic Product is expected to increase by 0.1% month-over-month (MoM) in November, swinging from the 0.1% decline in October.

UK Industrial Production may rise 0.1% MoM in November, following 1.1% increase in October. Meanwhile, the annual production could fall 0.4% in the same month, following a 0.8% decrease prior.

How could UK GDP, Industrial Production data affect GBP/USD?

GBP/USD may halt its losses if UK GDP and Industrial Production data meet expectations, shaping market views on the Bank of England’s (BoE) policy outlook. Any downside surprises would add to selling pressure on the Pound Sterling (GBP) against its major peers. Monthly Manufacturing Production will also be closely watched.

The GBP/USD pair remains under pressure as the US Dollar strengthens after stronger-than-expected United States (US) Producer Price Index (PPI) and Retail Sales data, along with last week’s lower Unemployment Rate, reinforced expectations that the US Federal Reserve will keep interest rates on hold in the coming months. Traders will also watch the weekly US Initial Jobless Claims data later in the day.

Technically, GBP/USD edges lower, trading around 1.3420 at the time of writing. The momentum indicator 14-day Relative Strength Index (RSI) is at 50 (neutral) after retreating from overbought readings, indicating balanced momentum. The immediate resistance lies at the nine-day EMA of 1.3444. A daily close back above the short-term average could open a path toward the three-month high of 1.3562. The primary support lies at the 50-day EMA of 1.3387. A daily close under the medium-term average would open the doors for the pair to navigate the region around the eight-month low of 1.3010.

GDP FAQs

What is GDP and how is it recorded?

A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

How does GDP influence currencies?

A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

How does higher GDP impact the price of Gold?

When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.