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Weak GDP shall trigger a correction in USD – FXStreet

FXStreet (Barcelona) - FXStreet Editor and Analyst Omkar Godbole sees the USD weakening against other currencies if the 10-year yields fall below 2.27% on account of weak Q3 GDP.

Key Quotes

“The recent strength in the US Dollar has been more due to the dovish actions of BOJ, ECB and BOE.”

“The treasury yields at the short-end and the long-end in the US traded lackluster in the range of 2.3% to 2.37% despite an uptick in the US CPI.“

“However, the yields may slump in the next week if the US Q3 GDP data prints lower than market expectation of 3.2%. Moreover, it will take a surprisingly weak GDP number to convince markets that the Federal Reserve will not hike interest rates next year.”

“The US Dollar may start weakening against the majors if the ten—year yield slides below the 2.27% mark. In such a case, the yen may very well turn out to be the biggest gainer against the US Dollar.”

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