As the greenback continues to strengthen, markets will focus their attention on some tier 1 US economic data which may have an impact on the current rally. The afternoon sees US Q1 2022 gross domestic product (GDP) released at 13.30.
Forecasts are for a print of 1.1% which is a lot softer than the previous quarter’s growth of 6.9% (Q4 2021). This highlights the current theme of a slowing global economy after the post-pandemic bounce back. Essentially, major global central banks are raising rates in a significantly slowing global economy.
The greenback will react to the data depending on the outcome, a softer reading may weaken the buck while a better than expected print could continue its strong rally. As European trade gets underway the $1.05 and $1.25 levels on the EURUSD and GBPUSD pairs look like they are about to be tested.
Written by Viv Savani. 6:34am, April 28th 2022
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