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US GDP misses forecast

Alex Hartley
Written by
Alex Hartley

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry.

| Friday 26 April, 2024

Daily Currency Update

US first quarter GDP growth was an annualised 1.6% data showed yesterday. This was well below the 2.5% consensus expectation, but inflation was stronger than expected with the core PCE deflator up 3.7% annualised versus 3.4% expected. This has suggested that this afternoon’s core PCE price index will be greater than the 0.3% forecast. The data has once again flipped the ever-changing sentiment on which central bank will cut interest rates first, suggesting a near-term Federal Reserve interest rate cut looks even more likely. Yesterday also saw US unemployment claims beat the forecast, falling to 207k and new home sales jump to 3.4% in March against a forecast figure of just 0.3%. GBP/USD pushes back above 1.2500 and has touched 1.2540 in the past hours. EUR/USD has tested 1.0750 this morning after trading just over 1.0700 yesterday. GBP/EUR has been a little more flat in its movement the past 24 hours, trading within a 20pip range on either side of 1.1650.

Key Movers

Overnight we saw the Bank of Japan policy board, by unanimous vote, to maintain the 0-0.10%. This was in-line with expectations but comes after Tokyo’s April inflation came in lower than expected, with the core inflation rate at 1.6% compared to the 2.2% expected. The eagerly anticipated core PCE price index form the US is due at 1:30pm this afternoon and after yesterday’s data announcement, this had added to the focus for USD volatility today. It is now expected to be a hotter than expected release with many suggesting a 0.4% announcement against the 0.3% forecast. This has added to a softer USD in the past 24 hours as sentiment has swapped again that the US could cut interest rates first. Any change to this expectation, on release, higher or lower, could swing the USD.

Expected Ranges

  • GBP/USD: 1.2430 – 1.2620 ▲
  • GBP/EUR: 1.1640 – 1.1690 ▲
  • GBP/AUD: 1.9030 – 1.9240 ▼
  • EUR/USD: 1.0660 – 1.0790 ▲

Written by

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry. With over 20 years of experience, Alex works closely with businesses to understand their foreign exchange requirements and align them with solutions. Placing a strong emphasis on customer service, he takes pride in nurturing long-lasting relationships with clients.

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