• USD: Lower, stocks rise, risk appetite improves as Q3 GDP beats expectations
  • JPY:Lower, industrial and manufacturing output rise, tracking equities
  • EUR:Higher, German unemployment falls, EU economic and industrial sentiment rise
  • GBP: Higher, German unemployment falls, EU economic and industrial sentiment rise
  • CAD and AUD: Higher, German unemployment falls, EU economic and industrial sentiment rise

Overview

USD and JPY traded lower Wednesday as US advanced Q3 GDP rises more than expected. The stronger than expected US GDP report sparked a rally in equities and helped to boost risk appetite as the data confirms that the US economy is emerging from recession. Jobless claims data was mixed, with first time weekly claims posting a modest decline and continuing jobless claims falling to the lowest level since March 21st. AUD outperformed supported by hawkish comments from Australia's finance minister that interest rates won’t stay at current emergency levels. EUR was supported by report of improving EU economic sentiment and an unexpected decline in German unemployment. GBP rallied to a six-week high versus the EUR supported by report that UK mortgage loans rose to an 18 month high. The key question is whether today's report of improvement in US GDP can be sustained or does the gain reflect a temporary rebound fueled by government incentive plans to boost auto and housing sales. FX price direction remains closely correlated to equities and risk sentiment..
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Today’s US data: 

US advance Q3 GDP rose by 3.5%, a 3.2% rise was expected. Jobless claims for week ending 10/24 fall 1k to 530k, a reading of 525k was expected..

Upcoming US data: 

On October 30th September personal income and consumption will be released expected at 0.1% and -0.5% respectively along with Chicago October PMI expected 49.1 compared to 46.1 last month's and final October Michigan sentiment expected unchanged at 69.4.