This quarterly result can really have an impact

Are you aware of the GDP release impact?; an event that normally has a major impact on the Forex market?

GDP (Gross Domestic Product) is normally used to gauge the health of a country, as well as to measure a country’s standard of living. Increasing GDP figures normal indicates towards a healthy economy, which is countered by rising interest rates. Negative GDP results show that the economy is contracting and is normally followed by rate reductions.

Why is this important for Forex Traders?

If good GDP figures indicate that an economy is healthy, then that economy will often attract investments, having an effect on the country’s currency.

For example a better than expected GDP figure in Europe will often show that the European economy is improving – This situation is often countered by rising interest rates and can cause the Euro to gain in value.

As shown on the following chart the GDP figure normally has a tremendous impact on the daily movement, often sending the currency pairs into a huge intraday trend.