Better than expected headline GDP: 2.9%, the highest in 2 years, but consumption is poor. However, net exports added 0.83 percentage points to GDP growth and that’s good news. Inventories also added to growth, and that’s a pendulum that can swing back down in Q4. The headline figure is eyed by politicians, and it favors Clinton, the incumbent over Trump the challenger.
The US dollar initially went up, but has swung lower. Update: the USD emerges as a winner but the move is not too huge.
- EUR/USD slides to 1.0915
- GBP/USD, which was already sliding, trades around 1.2150
- USD/JPY made a small move higher but stabilizes around 105.20.
- USD/CAD flirts with 1.34
- AUD/USD is around 0.7575.
- NZD/USD is trading at 0.7130.
The first release for GDP was expected to bounce back up to 2.5% (annualized) in a highly anticipated event. See how to trade the GDP with EUR/USD. After three quarters of poor growth hovering above 1%, the second half of 2016 was expected to see a rebound, a jump back to the “New Normal” of 2-2.5%. The release also has political implications, just before the US Presidential Elections.
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There are around 10 days left until the elections. Clinton is leading but Trump is slightly closing the gap.
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