GDP Figures take the USD Up

Big moves were seen in the Dollar yesterday due to better then expected U.S. GDP numbers. The USD gained more then 370 pips against the EUR as GDP dropped the largest percentage in 7 years. GDP contracted -0.3% in the 3rd quarter. The drop was largely contributed to U.S. consumers who cut back in spending. Consumer spending makes up roughly 70% of GDP.
Traders took the better then expected GDP numbers as a positive sign that the U.S. economy may prove more resilient in the face of the economic slowdown. GDP was forecasted to drop -0.5%, but when the numbers beat the street, traders rushed into the Dollar, sending it higher.
This is the second consecutive day the EUR/USD has seen abnormally large price changes. Two days ago, the Dollar lost over 500 pips when the Fed cut Interest Rates by half a percentage point. The unusual price movements have […]

Original post by Forextvblog

This entry was posted on Friday, October 31st, 2008 at 5:36 am and is filed under trading, gdp, forex, Daily Forex Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.