In contrast to the ADP figure, the release of the US GDP data (for the third quarter) was not a huge surprise. The figure (+2.8% annualized) was close to the median of analyst estimates (2.9%), so it was not a big surprise, says Ulrich Leuchtmann, Head of FX and Commodities Research at Commerzbank .
More US growth boosts needed for fresh USD strength
“Of course, with growth rates like these, the US still has a significant growth advantage over other large developed economies, which are virtually stagnant after the immediate post-corona recovery ended: the eurozone, the UK and Japan. And that justifies the strength of the USD. But we have to be careful. This growth advantage is not new. After all, the dollar is already strong. See figure below. on Fed expectations, asset prices and USD exchange rates, it seems to me.”
“More growth impulses in the US would be needed for new USD strength. Some currency traders may hope that a second Trump presidency will provide such impulses. That may well be the case. I would just like to remind you that they are also needed other conditions for this. Among other things, a Fed monetary policy that remains guided by reason.”
“Be that as it may, it seems plausible to me that some market participants want to wait until the election and do not want to take active positions based on current real economic data.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
