Q1 slowdown is
That is a marked slowdown; however, note that Q1 is usually the weakest in the US and strongest in Eurozone. Plus, the recent slowdown is well know and pretty much priced-in. Fed’s dovish tilt following December’s rate hike was largely due to domestic slowdown amid oil prices sell-off and heightened risk from global developments.
Hence, markets are unlikely to worry much unless the GDP print is weaker-than-expected. Moreover, the possibility of a better-than-expected GDP figure is high, given the goods trade deficit narrowed sharply in March.
Furthermore, Fed’s favorite gauge of – core personal consumption expenditure – is seen taking a big leap from Q4 2015 print of 1.3% to 1.9%. Anything just shy of estimates or higher-than-estimates could keep dollar bulls happy.
Also note – Bank of Japan’s (BOJ) status quo policy today may have put a temporary end to global mad rush towards negative rates. For Fed, this is good news since other central banks standing pat makes it easy for Fed to move rates higher. This again is supportive for US dollar .
GBP/USD hourly chart
Pair dipped below hourly 50-MA as anticipated earlier today.
- GBP's failure to take out strong resistance at 1.4617 despite a solid rebound from rising support after Fed statement release indicates exhaustion on the part of bulls.