- The final version of US Q1 GDP is likely to confirm the first read.
- A drop below 2% or a rise above 2.5% would be needed to rock the boat.
- The publication is set to provide a temporary relief from the trade wars.
The United States will publish its third and final version of growth for the first quarter of 2018 on Thursday, June 28th, at 12:30 GMT. The last read is projected to confirm the second read, which showed a growth rate of 2.2% annualized.
A growth rate of 2.2% is slower than Q2, Q3, and Q4 2017, but quite upbeat for a first quarter of the year in the US. 2017 was not the only year to start on the back foot and see a pick up later. In addition, the euro-zone and the UK suffered more significant slowdowns in early 2018 and they are still trying to find their feet.
All in all, even if the slow level of growth is confirmed, it still puts the US ahead of its peers. Moreover, while countries across the pond are still recovering, data for Q2 in the US looks much promising, with some talking about a growth rate of around 4% annualized.
What results could move the US Dollar
A confirmation of 2.2% growth would likely trigger an examination of the components, first and foremost, Personal Consumption. The US economy is all around consumption. Any upgrade in this component would support the US Dollar while a downgrade would weigh on it.
Among the other positive components, an upgrade in exports would help, and so would an increase in investment. On the other hand, growth in government spending and inventories is not the kind of growth markets want. A rapid rise in inventories during one quarter usually results in a depletion of these inventories in the following one.
A change in the headline would trigger a more significant result, but the deviation will likely need to be stronger. A fall under the round number of 2% would be a source of concern even if Q2 looks promising. Such a downgrade could weigh on the greenback.
On the other hand, an upgrade to 2.5% or higher would already be very bullish for the economy and the US Dollar as well.
Trade wars
The main theme haunting markets are the tariffs and counter-tariffs that the US exchanges with its North American peers, the European Union, and China, which is currently in the limelight. Even though GDP is an overview of the economy and a top-tier figure, the emotional swings of fear and relief amid news of trade actions will likely take back control once the dust from the publication settles.
More: Trade wars: Only a stock market crash can stop Trump, 3 reasons
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.1400 after US PMI data
EUR/USD comes under renewed bearish pressure in the American session and trades below 1.1400. Upbeat PMI data from the US and a Wall Street Journal report claiming that the White House is considering slashing tariffs on Chinese imports support the USD and weigh on the pair.
GBP/USD retreats below 1.3300 as USD rebounds
GBP/USD stays under bearish pressure and trades below 1.3300 on Wednesday. The US Dollar benefits from the upbeat PMI data and easing fears over a further escalation in the US-China trade conflict, causing the pair to push lower.
Gold slumps below $3,300 on signs of de-escalation of US-China trade conflict
Gold extends its decline and trades below $3,300 in the second half of the day on Wednesday. The Wall Street Journal reported that the Trump administration was considering to lower tariffs on Chinese goods, reviving optimism about a de-escalation in the trade war and causing Gold to lose interest as a safe-haven.
Bitcoin bullish momentum builds as premium exceeds 9% for first time in three months
Bitcoin price is extending its gains, trading above $94,000 at the time of writing on Wednesday, following a two-day rally of 9.75% so far this week. BTC rally gathers momentum as trade war fears ease, following US President Donald Trump’s downplaying of tensions with China.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.