Worse-than-Expected UK GDP Could Boost Dollar Index
Tomorrow's top news for the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) will be the release of the UK GDP report. If the data falls short of forecasts, the Dollar Index may jump by some 11 points based on historical averages.
Research shows that price movement may be significant if the outcome is disappointing. Last quarter, the UK's output contracted by 0.3 percent, on the heels of a temporary boost due to the Olympic Games. The following table summarizes the average 1-minute changes in the US Dollar Index following the release of UK GDP quarterly data, from between January 2011 and March 2013.
A worse-than-expected report has historically lead to the greatest increase in the Dollar Index, significantly differing from the overall average one-minute change in two years—effectively zero. Furthermore, it appears evident that trading on positive data is difficult, as an increase in GDP data will not necessarily result in a bullish Pound.
http://media.dailyfx.com/illustratio...eenShot179.png
Tomorrow's top news for the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) will be the release of the UK GDP report. If the data falls short of forecasts, the Dollar Index may jump by some 11 points based on historical averages.
http://img829.imageshack.us/img829/1...2013april2.png
Research shows that price movement may be significant if the outcome is disappointing. Last quarter, the UK's output contracted by 0.3 percent, on the heels of a temporary boost due to the Olympic Games. The following table summarizes the average 1-minute changes in the US Dollar Index following the release of UK GDP quarterly data, from between January 2011 and March 2013.
http://img507.imageshack.us/img507/9...013april24.png
A worse-than-expected report has historically lead to the greatest increase in the Dollar Index, significantly differing from the overall average one-minute change in two years—effectively zero. Furthermore, it appears evident that trading on positive data is difficult, as an increase in GDP data will not necessarily result in a bullish Pound.