• U.S. Q3 GDP beats forecasts and lands on an unrevised annualized rate at 33.1%
• FOMC minutes remained ambiguous regarding asset purchases, and DXY Index reached monthly low
• NZDUSD continues the upbeat momentum and likely to be firmly bullish for the short-term
U.S. GDP for the third quarter grew at an unrevised 33.1% annualized rate, showing historic pace of expansion. The forecast for Q4 is currently at 5% annualized rate. Recall that Q2 GDP contracted at 31.4%, a record low since 1947, the Q3 GDP at least has shown a positive message. However, the market is now waiting for another rescue package, which will not likely be announced before Biden is sworn on January 20th.
USD selling pressure remains and downward momentum appears to have accelerated. FOMC meeting minutes from the latest Fed meeting has sparked little movement. There is still a lack of clarity regarding the scale and scope of the bond buying program. Fed officials “generally judged that asset purchases would continue to support smooth market functioning” but the market is waiting for more details and confirmation. If the December Fed meeting cannot guarantee more confidence, USD will likely enter an oversold territory.
NZDUSD continues to show bullish after government officials recommended RBNZ to include housing prices to the central bank’s remit earlier this week. In the short-term at least, Kiwi appears to be on a firm bullish footing.
As the market entering the holiday season, with Christmas and New Year following Thanksgiving, volatility is expected to go low, and overall will likely show a calmer pace. Approaching the year end we still have Brexit’s final deal closure to watch, which will for sure spark some further movement among major currencies.