It's fairly significant to notice as we prepare for the release of the US GDP that the we had such a surprise form the UK GDP last week. Expecting a reading of +0.6%, the data actually printed at +1.1%, nearly double the forecast.
Leading up to the release, the UK certainly had a mixed bag of fundamental data releases, nothing to make a trader expect that that the GDP would be double expectations. The same could easily be said for the US. Both are drowning in debt. Both are suffering from housing debilitation. Employment seems to be better in the UK, but not so much so that it would warrant such a surprise.
It is important to remember that Government releases are not always what they appear, and we can't always figure out why.
So we watch and wait to see how the data will post in 10 hours or so. But added to that mix is the overall report from the Bank of England, detailing further dovishness ahead. Mixing that with the recent notes from RBNZ, and falling inflation in the commodity block nations, perhaps we are starting to see the currencies beginning to misstep, and their counter move against the dollar coming to an end. Hopefully tomorrow will give us a better idea.
Happy Trading!
Bill
bill@thefxtradingmasters.com
www.thefxtradingmasters.com
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