Today final estimate of US third quarter GDP will be released at 13:30 GMT.
After first US rate hike by FOMC, GDP figure stands vital in determining Dollar's next move.
Past trends -
- US GDP picked up pace since 2013 and increased pace in 2014. However after rising 5% and 2.2% in previous two quarters, US GDP shrank by -0.1% in the first quarter of 2015. Historically speaking US economy usually falters in first quarter.
- Second quarter was relatively better, with GDP growing at 2.1% in second quarter from the first.
Expectation today -
- Market is expecting GDP to grow at least 1.3% on quarterly basis and at annualized rate of 2.1%. However data could surprise to the upside, given third quarter historically has been a strong one.
Market impact -
- Expect Dollar to gain if data surprises to upside. More so because, FED is still expected to hike policy at least twice next year, according to latest market expectations. Stronger data might boost equities, especially in US as growth fear would further subside.
- Weaker data is likely to derail Dollar, however large shift is unlikely given hawkish comments from FED.
Dollar is somewhat in back foot, since the hike and on its way to worst month since April. FXCM Dollar index, currently trading at 12120.
