Economists were quick to poke holes in a strong US GDP report but it's the inflation picture that should be in the spotlight. The kiwi was the top performer Thursday as it defied RBNZ jawboning while the yen lagged. Up next it's the Japanese CPI report and the BOJ decision. In the Premium trades
, both GBPUSD shorts were closed prior to reaching their final targets, attaining a combined profit of at least 210 pips. AUDUSD and NZDJPY shorts as well as longs in USDCHF remain in progress.
US GDP rose at a 3.5% pace in the preliminary Q3 report, beating the 3.0% consensus. The dollar jumped 30 pips across the board but the gains were almost immediately erased and the dollar continued to fall throughout the day.
What happened? Most economists pointed to the large boost in GDP because of US defense spending. That added about 0.6 pp. Others pointed to trade but that could continue to be a boost because of rising oil production. Consumer spending was also slower at +1.8% but it's a challenge to separate the effects of lower gasoline prices at the moment.