hi guys,
pretty simple question. why did the us gdp report have the effect it did on the usd pairs. isnt the gdp a good thing for the country. why would it add to dollar weakness.
in recent times the usd like the yen has been seen as a flight to safety when things are bad, traders support theses currencies when there is ‘risk aversion’. whereas when things pick up people support the higher yileding currencies, ‘risk appetite’ intices the traders so this data gave traders to buy pound, euro aud etc.
Prior to the GFC the yen was predominantly the currency that this phenomen occured but since the start of GFC the usd has been added to this basket as traders see the usd as a safe have…
However, this dynamic may change in the future nothing is set in stone
hi … in a simple view, the traders will be thinking
" hey the gdp is good… oh oh so US is doing ok…Yah man… that means the world is doing fine too… alrighty its back to the good old days… LETS TRADE OUR USD for SOME EURO TO INVEST "
there you good… a very simple explanation …