EURUSD, H1
The US Q1 GDP growth trimming to 2.0% from 2.2% undershot estimates thanks to a big boost in the Q1 chain price gain to 2.2% from 1.9%, which mostly reflected a big drop in the price index for imports that translated to a surprising real import boost and a big $5.9 bln downward bump in net exports. We also saw a larger than expected $6.3 bln downward inventory revision, but an offsetting big boost in intellectual property investment, along with the expected boosts in private and public construction and small downward bump in consumption. Final sales were unrevised at 2.0%, and Q2 GDP estimates remain around 4.0%. The surprisingly lean -$1.7 (was $4.6 bln) Q1 inventory contribution to GDP growth, which left an anemic $13.9 (was $20.2) bln accumulation rate, reflects the lean path for inventories since the 2015-16 petro-hit. Beyond inventories, the Q1 GDP figures extended the pattern of robust business fixed investment growth since early 2017, which now shows a solid 10.4% (was 9.2%) clip in Q1, along with the usual seasonal weakness in Q1 that manifested itself this time around in the form of weak Q1 consumption, residential investment, and inventories, and an import gain that extended a big Q4 surge. There appears to be a solid growth path for exports that reflects a faster growth rate for global GDP.
The dollar fell following the softer GDP revision and higher jobless claims (there was a 9k rise this week to 227k, expectations were for 220k and only a 2k rise) , taking EURUSD to 1.1599 from near 1.1580, and USDJPY to 110.10 from 110.23.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/07/03 14:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
