Awaited GDP Holds USD at 2-Month High

Awaited GDP Holds USD at 2-Month High


The dollar index which measures the greenback against a basket of major currencies traded near a two-month high of 97.72 ahead of key economic data. Market participants await the preliminary second-quarter GDP figures to have more clues about the economic activity. Moreover, the report will carry the GDP Price Index, which would have a significant impact on the probability of interest rate cut. The CME Fed watch tool is showing a probability of 78.6% that the Fed will cut rates by 25 basis points next week, and 21.4% a 50 basis point rate cut. The US 10-year yields settled at 2.084%, and the USDJPY edged higher to 108.75.


The Euro finished almost flat against the United States dollar after a choppy day. The European Central Bank left key interest rates unchanged while signaling that rates could fall in the coming months to lower levels, and QE could be started again. The EURUSD dropped initially to a low of $1.1100 on the dovish statement, but snapped back losses and rose to a high of $1.1187 on Draghi's presser. He stated that the chances of a recession remain low, and several board members prefer to wait for additional data to apply easing measures. The ECB's "hold and see" policy lowered the chances of aggressive easing by the Federal Reserve in the coming meeting next week. Draghi expects the Fed to cut interest rates by only 25 basis points next week.


Gold prices dipped as the ECB failed to deliver the easing promises driving down the chances of a 50 basis point rate cut by the Fed next week. The precious yellow metal was finding support from the expectations that Central Banks are shifting their monetary policy stance from tightening to easing. However, yesterday's disappointment weighed on the price of a gold ounce which dropped to a ten-day low of $1411. The price of a silver ounce fell to $16.30, and palladium tripped to $1523.


Oil prices inched higher during today's Asian session as the escalating geopolitical tensions offset the concerns of weaker economic growth. The recent economic data continued to signal a serious slowdown in the world's top economies, which could push oil demand lower, while Central Banks are still reluctant to act. However, the prices are still finding support from the rising geopolitical tensions following the incidents in the Gulf, increasing investors' woes over oil supplies safety. The West Texas Intermediate crude futures rose to $56.37, and Brent futures nudged higher to $63.65.

Major Economic Events

GMT Country Event Expectation Previous



GDP (QoQ) (Q2) 





GDP Price Index (QoQ) (Q2) 





U.S. Baker Hughes Oil Rig Count




The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

CFDs and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Your profit and loss will vary according to the extent of the fluctuations in the price of the underlying markets on which the trade is based. Read More
Read More
Mail Call Chat