US Adv. GDP q/q 10/29/09

8:30am (NY Time) US ADV GDP q/q     Forecast 3.2%     Previous -0.7%
ACTION: USD/JPY USD/CHF                     BUY 3.5%                SELL 2.9%

Our focus tomorrow will be on the first quarterly release of U.S. GDP numbers.  Analysts are already saying that we could be looking at upward surprises as recent market sentiment is at all year high.  We are looking for a 0.3% deviation on the expected 3.2%.  Therefore if we get a 3.5% on the advanced 3rd quarter GDP, it would be US Dollar positive.  We will BUY USD/JPY.  However, if we get a 2.9% release, then we would be SELLING USD/JPY. With USD being regarded as safe-haven currency, if we get a worse than expected number, we might still see USD getting stronger as traders scramble to BUY US Treasuries, making USD stronger than most european currencies such as Euro and Sterling.

One interesting observation is the fact that USD was at all-time lows just a few weeks ago.  With the equity market on correction and USD rebounding, we could see the fundamental outlook of USD coming into play for a stronger USD on a better release, instead of the usualy risk sentiment movement.  Of course the real confirmation will be at the actual release time, as the market will determine the actual effect of this news… what I’d do is sit back and watch how the market reacts first, then get in a few minutes after; if the release has momentum to push through, a few minutes won’t really matter, but the safety of the late entry is priceless…

DEFINITION:

“GDP, which is defined (from wikipedia) as “the market value of all final goods and services produced within a country in a given period of time. It is also considered the sum of value added at every stage of production of all final goods and services produced within a country in a given period of time.” GDP number has a direct effect on the Interest rate of the currency, it is one of the news indicators that affects FOMC’s decision directly.”

Related posts:

1. UK Final GDP q/q 03/30/2010
2. UK Revised GDP q/q 11/25/09
3. Canada GDP (Gross Domestic Product) m/m 10/30/09
4. Canada GDP m/m 08/31/09
5. UK Revised GDP q/q 05/25/10
6. UK Revised GDP q/q 02/26/2010
7. US ISM Non-Manufacturing PMI 11/04/09
8. Forex News Trading UK Revised GDP q/q 11/24/10
9. Forex Trading Plan For UK Revised GDP q/q 08/27/10
10. Forex News Trading UK Prelim GDP 10/26/10

Tagged as: 3rd Quarter, Confirmation, currency, Decis, economic outlook, european currencies, Few Minutes, FOMC, Forex, Forex News, Fundamental News, GDP, Gross Domestic Product, Interest rate, JPY, market sentiment, Momentum, Observation, Period Of Time, personal consumption, pips, Quarter Gdp, Quarterly Release, release time, risk aversion, safe haven, Sterling, Surprises, Time Lows, Treasuries, US, USA, USD, Wikipedia