Britain’s GDP for the second quarter was revised upwards today. Revised GDP exceeded the initial publications in many countries. If the second quarter is better, will we see strong growth in the third quarter? A look at recent releases and their impact on forex trading. Not all countries are recovering equally, and these differences are already seen in currencies.
Gross Domestic Product in the UK has been revised upwards for the second quarter of 2009. The original release showed a contraction of 0.8% while the updated release showed a fall of 0.7%. Though the difference isn’t big, GDP is one of the most important releases, so this pushed the GBP/USD upwards.
GBP/USD already began recovering from the big blows it got this week, and enjoyed the greenback’s retreat last night. The better-than-expected GDP pushed it above 1.63, now trading at 1.6330.
American GDP for the second quarter was better than expected. The consensus was for a deeper contraction than first published – a dip from 1% to 1.4%. The actual revised GDP remained at a fall of 1%. Though the revised version wasn’t better than the initial one, it exceeded expectations.
The biggest surprise came from the wold’s fourth largest economy, and Europe’s largest economy: Germany. German GDP for the second quarter was expected to shrink. The initial reading showed surprising growth in Germany – 0.3% and it was confirmed by the final GDP release this week.
Also France showed surprising growth, and the all-European figure was also better than expected. I’m curious for the final GDP release in Europe. It might also surprise with growth instead of contraction.
The surprising growth in Germany helps EUR/USD to edge upwards in recent weeks, taking a slow ride in an uptrend channel. Currently it didn’t break strong resistance lines. Forex volume is low in the summer.
Also in the other side of the world, in Japan, growth was reported in the second quarter – 0.9%. This will only be finalized in two weeks time, but the preliminary release is good for Japan and the Japanese Yen.
All in all, the recovery seems more and real. We should get a solid confirmation only when the third quarter figures are released.
Some countries are recovering faster than others, and this impacts forex trading. Europe and Japan are doing better than the US and Britain, and this can be seen in the recent weeks’ price action.
The first week of September will see a higher volume of trade and bigger moves are possible.