GDP Data As Expected &Nbsp; Can The Fate Of The Dollar Usher In A Turning Point?

Released last Friday

GDP data as expected

The third quarter GDP data released by the US Department of Commerce on Friday showed that the actual GDP quarter rate of the US grew by 2% in the third quarter, which is greater than 1.7% in the two quarter.

The data also showed that the third quarter final sales value of the US increased by 0.6% in the first quarter, rising by 1.2%, and the 2.6% quarter in the third quarter. This is the best performance since the fourth quarter of 2006. In addition, the initial value of commercial investment increased by 9.7% in the three quarter.

The above figures are in line with expectations before the market. The US dollar fell on the New York session last Friday, but the impact of data on exchange rate fluctuations is not particularly large.

The unexpected results made the market more confident that the Federal Reserve will introduce a new round of quantitative easing policy at this week's meeting, as the level of GDP in the third quarter has expanded slightly more than the previous quarter, but this level is still not enough to allow the US unemployment rate to fall quickly.

President Obama said on Friday that the United States is moving out of the worst recession in 80 years, and that the task now is to accelerate economic recovery and further stimulate economic growth.

It seems that the new round of quantitative easing policy is already a foregone conclusion, and the suspense still depends on the size of the stimulus. The Federal Reserve will announce the interest rate resolution and policy statement of the November monetary policy conference in Beijing on Thursday morning.

The impact of the US dollar's quantitative easing has fallen sharply in the past two months, but with the coming of the policy, the fate of the US dollar may turn a corner.

The Fed's two quantitative easing is no longer a new topic. In September this year, Goldman Sachs held a telephone conference that the US dollar may be the first to introduce new stimulus measures in November.

Now that the new round of quantitative easing is announced soon, there is a consensus in the market that the Federal Reserve will announce the new stimulus policy. The suspense is just the scale of the quantitative easing.

The impact of the size of the stimulus measures on the US dollar will depend on how the market is understood. The prevailing view is that if the stimulus size is limited, the US dollar may reverse the downtrend; if it is a big stimulus, it will mean a further disorderly drop in the US dollar.

Tang Wei, assistant analyst at Dai Sheng Shanghai office, told reporters that he thought that the scale of the stimulus would probably not exceed 1/3 last year. But what we should pay attention to is that if the average growth rate of GDP in the US economy can not be effectively stabilized over 3% of the long-term average trend level, the government's tax revenue will not be able to fill the federal deficit. It is still possible to continue to implement quantitative easing of 3, 4 or 5.

He also said that if the economic growth rate of the United States is still below the trend of economic growth for a long time after the implementation of multiple measures, the cumulative effect of the total size of the total volume will be the internal injury that the US dollar will have to depreciate for a long time.

He stressed that the long-term trend of the US dollar is to depreciate, but that is the next thing. In the coming year, the US dollar is likely to rebound strongly because of bad profits in the short term.

Risk events are frequent this week.

In addition to the Federal Reserve's monetary policy meeting, there are a number of other risk events this week. For example, the mid-term elections in the US Congress will be held in November 2nd. The competition between the Democratic Party and the Republican Party has entered a white hot stage, and the election result may be about the fate of the US dollar in the medium term.

In addition, this week also held interest rate meetings such as the Australian Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank. The main central bank's policy trend is expected to cause turbulence in the foreign exchange market.