Influence of GDP in Forex market
GDP is the sum total of all goods and services produced by all companies in a country (produced nationally and abroad). This index is the main indicator of the condition of the national economy and it effects the Forex market to a substantial degree. Actually, the development of a GDP index means that country’s economy grows too. The Trading signal is a change in the index of 0.4%.
Usually there are three GDP values published: GDP advance which is released near the end of Jan., April, July and Oct. of each year, at 08:30 a.m. EST (New York); GDP temporary or GDP revised, which is published a month after advance GDP also at 08:30 a.m. EST (New York); then one more month later at the same time the GDP final is released which is only usually slightly different from the previous one.
Deflator of GDP
This is a constant used to modify the GDP value in agreement with current prices in order to get a value relative to the prices in a ‘base’ year (the year which GDP is considered to be the base one in the consistent country). The GDP deflator is a good indicator of inflation. It is released together with the GDP final and has a strong effect over the Forex market. When major discount rates increase together with the GDP deflator, the national currency exchange rate increases too.