Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
Will American GDP growth boost USD?
What will happen?
United States Bureau of Economic Analysis will release quarterly preliminary GDP growth on February 24, at 15:30 GMT+2. This is the annualized change in the value of all goods and services produced by the economy. This indicator is one of the basic ones and shows the health of a country’s economy in general. This time the second estimate of the US GDP growth is published.
How will it affect the dollar?
The better the situation in American economy, the greater the probability that the Fed will raise its interest rate. As a result, when the actual figure is greater than expected, it’s good for the US dollar.
On November 24, 2021, the last release of the preliminary US GDP growth led to the gradual boost of the USD approximately by 300 points during the day, even though the difference between the predicted indicator and the actual was only 0.1%. Most likely, next week’s announcement will immensely influence the USD.
How to trade on the prelim GDP release?
Due to the significance of the GDP data, it will influence USD pairs in any case. Therefore, any result will lead to the volatility of this currency, either in a good way or vice versa.
If the indicator is the same as expected or higher, the US economy is doing great, and the USD will rise. On the other hand, if it’s lower than the prediction, it can show the problems of the US economy, so the USD may fall for a short period of time.
Check the economic calendar
Instruments to trade: EUR/USD, NZD/USD, USD/JPY, USD/CAD
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