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The US dollar is down across the board with no exceptions: even currencies that are in trouble are celebrating against the greenback.

The sell-off of the greenback comes just one day before the all important GDP and the Fed decision. Are markets smelling  a double-disappointment or are they getting ahead of themselves, providing a buy opportunity for the dollar.

  • EUR/USD has extended its gains and reached 1.0934, climbing around 80 pips. It is not too far from the round 1.10 level. Greek jitters still cause troubles.
  • GBP/USD was hit by a weak UK GDP release, but made an amazing 100 pip turnaround, despite the political implications for the report that could exacerbate the situation.
  • USD/JPY is at 118.86, towards the low end of the range.
  • USD/CAD extends its falls, trading around 1.2060. The  pair first dipped to the 1.20 handle on stronger oil prices.
  • AUD/USD is making one of the more impressive moves, rising to 0.7960 and going up without stopping. The lack of any downing from Governor Stevens from the RBA paved the path for gains.
  • NZD/USD is also moving up, trading just under 0.77.

GDP is expected to show a gain of 1.1% (annualized) in Q1 2015, and some worry it could even turn negative. The recent  losing streak of economic indicators leads some to speculate that the US has even entered a recession. This seems a bit too gloomy at the moment.

Could low expectations lead to a big bounce on a minimal beat?

See how to trade the GDP with EURUSD.

The Fed is expected to leave policy unchanged but its updated view on the economy is critical.

The biggest downer was the  jobs report for March, that saw a poor gain of 126K jobs. The Fed’s current assessment of the labor market is that it is “strong” and this might change. However, the inflation situation looks better and the Fed may still see Q1 as a one-off.

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