Strengthening USD

Today proved to be a great day for anyone going long on the USD. US 2nd quarter GDP estimates were already looking optimistic at 3.2% especially when compared to the first quarter’s slowing of 0.6%. But those estimates proved conservative today at 8:30 am when GDP posted at a strong 3.4%. Opening positions yesterday was key as most gains were made before the announcement.

Great pairs to trade against the dollar included GBP, EUR, and NZD. Looking at the GBP, the pair was at its highest at 2.0486 within the first hour of the day (ET). In anticipation of the 8:30 am GDP announcement, the pair lost almost 200 pips to 2.0292. It hit its lowest level of the day at 2.0249 at 12:15 PM. The same held true for the Euro pair. After starting the day at 1.3744, the pair made a drop to 1.3633 before the figure was released. After figures were released though, both the GBP and EUR regained some strength suggesting that the GDP figure wasn’t as strong as expected.

Like the EUR and GBP, the NZD strengthened a bit post-GDP announcement. But after a half hour of trading, the NZD made more than a 100 pip move to its lowest level of the day at .7628.