When is the US GDP report and how could it affect EUR/USD?

Haresh Menghani FXStreet

US Q1 GDP Overview

Friday's US economic docket highlights the release of advance (first estimate) of the US Q1 GDP growth figures, scheduled to be published at 12:30 GMT. The US economy is anticipated to have expanded at an annualized pace of 2.1% during the first quarter of 2019, from 2.2% growth recorded in the previous quarter and marking a further deceleration.

Meanwhile, Joseph Trevisani - Senior Analyst at FXStreet writes, “the late arriving retail sales figures, the much better business capital spending, the rebound in consumer optimism and the buoyant labor market background all point to an improvement in the general economy in the just-completed quarter. The Atlanta Fed GDPNow model agrees to post a 2.7% pace.”

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction on the pair, in case of a deviation between -0.88 to +0.68, is likely to be in the range of 27-28 pips in the first 15-minutes and could extend to 72-83 pips in the following 4-hours.

How could it affect EUR/USD?

Ahead of the important release, Yohay Elam, Analyst at FXStreet provides important technical levels to trade the major: “Euro/dollar is battling 1.1140 which was the initial low after the downfall. The new 2019 trough of 1.1118 is the next line to watch. Further down, we are back to levels last seen in 2017: 1.1025 and 1.0900.”

“1.1176 was the previous low of the year, set back in March. 1.1205 was a swing low earlier in April, now serving as resistance. 1.1230 separated ranges earlier this week, and 1.1265 capped EUR/USD earlier,” he added further.

Key Notes

• US First Quarter GDP Preview: Reasons to be cheerful

• US Q1 GDP Preview: Banks expecting growth to rebound strongly

• EUR/USD: Focus on US GDP, US dollar vulnerable to sell the fact trade

About the US GDP

The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the USD, while a low reading is negative.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD tumbles amid soaring US yields, ahead of jobs data

The Aussie Dollar stumbles over 1% against the US Dollar on Wednesday as US Treasury yields soar, with the US 5- and 10-year T-note yields surpassing the 5% threshold amid investor confidence in further Federal Reserve tightening. The AUD/USD trades at 0.7039 after peaking at 0.7118.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold falls to weekly troughs below $4,300

Gold rapidly leaves behind two daily upticks in a row and comes under heightened downside pressure midweek. Indeed, the precious metal breaches below the $4,300 mark per troy ounce to reach weekly lows amid the marked recovery in the US Dollar and the generalised upbeat tone in the US money market.

Australia unemployment rate expected to remain unchanged at 4.5% in August

Australia will release the August monthly employment report on Thursday at 01:30 GMT. Ahead of the announcement, analysts expect the country to have added 20K new jobs in the month, while the Unemployment Rate is expected to remain steady at 4.5%. The Australian Bureau of Statistics (ABS) report is also expected to show that the Participation Rate stood at 66.9%, unchanged from the previous month.

Freight costs may reach US shelves after the Fed plans to stop hiking

The Federal Reserve has forecast its main reference rate unchanged through 2027, a year when higher shipping costs are likely still reaching US store prices. Shipping a container from Asia to the US costs more than four times what it did before the war with Iran began in late February. International Monetary Fund research puts the peak effect on shop prices roughly a year out, in 2027.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.