Investors await first look at U.S Q2 annualized GDP
The United States economy releases the first look at second-quarter annualized GDP later today, with most economists predicting that the American economy will have expanded less than initially thought. A weaker than expected number today would certainly heighten calls for a second-consecutive interest rate cut from the Federal Reserve next month.
Although traders and investors will react to the GDP headline number, U.S President Donald Trump’s reaction to the number may have a far greater impact. With today’s number expected to come in at a disappointing two percent, the U.S President is likely to be less-than-impressed with an annualized GDP number under the three percent threshold.
President Trump has repeatedly blamed Federal Reserve Chair Jerome Powell for causing the American economy to miss its overall growth potential. Later today, we may see another Twitter tirade from President Trump directed at FED Chair Powell, calling for a dramatic rate cut on September 18th.
With the trade war heightening, comparisons between the United States and China’s GDP headline numbers are natural and may cause the Trump administration to fixate on closely matching China’s growth rate. Market participants are unlikely to be overly bearish towards a two percent annualized GDP figure, as the United States economy continues to better most developed nations in terms of economic growth.
GDP annualized is categorized as the gross measure of overall economic activity, as it indicates the pace at which a country’s economy is growing or decreasing. Such a clear economic indicator is a favourite of President Trump, alongside the latest fluctuations in the Dow Jones Industrial Average and the S&P index.
USD/JPY Daily Candlestick Chart | Source: ActivTrader
The U.S Dollar has been wildly fluctuating against the Japanese yen currency on any substantial Sino-U.S trade news, leaving the risk-sensitive pair exposed to the upside and the downside. Major resistance is found at the 106.90 and 108.00 levels, while key support is found at the 104.50 and 103.90 levels.
Written by Nathan Batchelor, External Analyst, ActivTrades
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