Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation’s currency. GDP is the broadest measure of economic activity and considered to be the primary gauge of an economy’s health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. A strong economy also persuades the central bank to raise interest rates in an attempt to control growth. All of this activity will increase demand for the nation’s currency.
Pair: GBP/USD
Bias: Flat
Result: No Trade
Max Spread (oanda): 7.5pips
The pound had moved over 150 pips one hour prior to this release, so we were wary about what to do. There was no deviation from forecasts, so this was a no-trade. The prior move may have been due to european interest rates warning, some comments from a chinese minister about the strength of the dollar or the bombings in Baghdad – the worst yet since fall of saddam. Who knows?
