The US economy grew at an annualized pace of 6.4%, within estimates. GDP was held down by inventories, which will likely be replenished later on. Robust business investment implies an acceleration down the road. A leap in prices means inflation is moving up, potentially triggering a rate hike. The Federal Reserve will keep printing dollars and depress the currency – less than 24 hours after making that assumption, Gross Domestic Product figures for the first quarter are already causing a rethink. While the headline is at 6.4% annualized growth – well within expectations – the components are pointing to heating and perhaps overheating economy. That could boost the dollar. Here are three positive developments that could boost the greenback: 1) What comes down, goes up Had inventory growth remained unchanged, GDP would be 9% and not 6.4%. The drawdown in physical stocks dragged growth some 2.64% annualized, a substantial impact. When inventories are depleted during one quarter, they tend to be replenished in the following one. Moreover, this drawdown could push manufacturing higher. The second quarter is already looking strong amid the quick reopening, and now it looks even brighter. 2) Investing in the future Business investment is up 9.9% annualized in the first quarter and home investment has leaped by 10.8%. Such expenditure will bear even more fruits in the future, whether in the current quarter or the next ones. It is also a sign of confidence in the world’s largest economy. 3) Inflation is coming Jerome Powell, Chair of the Federal Reserve, prepared a full speech to explain why inflation is transitory – base effects and bottlenecks are to blame. The Fed is watching but assumes price rises will dissipate. However, inflation figures published in the GDP report point surprised to the upside,w with the price index – aka the “deflator” jumping by 4.1% annualized compared with 2.6% projected. While the core figure is only at 2.3%, the rapid advance in headline prices could eventually spill into inflation expectations. That could move the Fed toard tapering its bond-buys sooner rather than later. Overall, growth components are pointing to faster expansion down the line, and could eventually push the dollar out of its current hole. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next AUD/USD retreats further to the 0.7750 area FX Street 1 year The US economy grew at an annualized pace of 6.4%, within estimates. GDP was held down by inventories, which will likely be replenished later on. Robust business investment implies an acceleration down the road. A leap in prices means inflation is moving up, potentially triggering a rate hike. The Federal Reserve will keep printing dollars and depress the currency - less than 24 hours after making that assumption, Gross Domestic Product figures for the first quarter are already causing a rethink. While the headline is at 6.4% annualized growth - well within expectations - the components are pointing to… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.