The Dollar is up marginally following the release of better-than-expected US GDP data but remains within a very narrow range ahead of tonight’s Federal Reserve policy meeting. More precisely, in the past 7 trading sessions the Dollar trade-weighted index has remained within a 0.18% range. To put this context in the past 2,800 trading sessions the Dollar has been in a 7-day range narrower than 0.2% only 45 times (i.e. only 1.6% of the time).
US GDP growth slowed only marginally in Q3 to 1.9% qoq (seasonally-adjusted annualised) from 2.0% qoq in Q2, based on the advance release from the BEA. While household consumption growth slowed sharply to 2.9% qoq from 4.6% qoq and government spending growth slowed, there was a smaller decrease in private inventory investment and upturns in exports and in residential fixed investment.
Sterling has shown little reaction to parliament’s vote yesterday in favour of holding a general election on 12th December, with GBP/USD still hovering around 1.287. Opinion polls suggest that the ruling minority Conservative Party will secure a majority, which would in theory make it easier for Prime Minister Johnson to get his Brexit deal approved by the House of Commons.
