Be Prepared! US Preliminary GDP Tomorrow At 12:30 GMT
We at ForexYard, encourage our customers to get involved in the most intense market events. As such, we think you should know that US Preliminary Gross Domestic Production (GDP) figures are expected tomorrow, August 28th, 12:30 (GMT), and you need to be prepared. Market events like this one tend to create either big changes to current trends or push current trends even further. Generally, the majors are the ones most affected by market events in general but Crude Oil, Gold prices, and even the price of Silver can change dramatically in the seconds after such a publication. For more information about the US Preliminary GDP, please read below.
WHAT IS THE “PRELIMINARY GDP”?
The Preliminary Gross Domestic Product (GDP) is a survey that is being used to measure the annualized change in the value of all goods and services produced by the relevant economy. It is defined as the total market value of all goods and services produced within the U.S economy in one quarter, in this case the 2nd quarter. The survey is released on a quarterly basis and it measures the differences compared to the same quarter in the previous year. There are three versions of the GDP released a month apart - “Advance”, “Preliminary” and “Final”. The “Advance” estimates are based on source data that is incomplete or subject to further revision by the source agency, while the adjusted figures are delivered through the ‘Preliminary’ version.
Traders follow this survey very closely because it is considered to be the broadest measurement of economic activity and a primary gauge of an economy’s health.
If the Survey Comes Inline with Market Forecasts
Expectations for this quarter reveal that the preliminary U.S. GDP figures will probably rise from 1.9% on the ‘Advance’ publication to 2.6% on the ‘Preliminary’.
Previous surveys have shown that publications that go inline with market forecasts tend to support the Dollar, they have also shown that in cases where publications have beaten analysts’ forecasts, the market was greatly impacted, and the USD had instantly rose, usually in a dramatic trend.
Because previous GDP releases from the U.S. have greatly fluctuated and failed to deliver a steady rate of growth, the expected 2.6% rate should act as another indicator that supports the developing stability of the U.S. economy, thus generating another bullish session for the USD. It could conclude in a 1.4500 rate against the EUR, making a 10 month high for the USD.
If the Survey Will Surprise With Bearishness
When the actual figure is lower than forecasted, investors are likely to see the USD depreciating against its currency pairs and crosses. For example, the ‘Advance’ GDP release, which took place on July 31st, failed to achieve its expectations for a 2.2% growth rate, and only delivered a 1.9% growth.
Taking a look at the EUR/USD chart, from July 28th and up to August 15th, the USD went through a coherent bullish session, gaining over 1,000 pips against the EUR, which only halted for one day, July 31st. That day the U.S. GDP failed to reach analysts’ predictions and the Dollar dropped against the EUR, in spite of a very strong bullish trend. Therefore, in case this survey will deliver a lower result than 2.6%, the USD might face a reversal trend, and could once again test the 1.4900 level vs. the EUR, this time, might even breach it.
