Gross Domestic product

The Gross Domestic Product represents the value of all finished goods and services produced by a country within a specified period of time. While GDP is generally calculated on an annualized basis, many countries release GDP numbers on a quarterly basis.

Furthermore, the forex market typically looks at the percentage change in Gross Domestic Product over a given time frame.

GDP includes government purchases, the nation’s trade balance, investments and all public and private consumption that occurs within the nation’s borders. U.S. GDP is released by the Bureau of Economic Analysis every quarter.

GDP is one of the most widely monitored of all FX economic indicators, and any significant consensus deviations or revisions can impact the forex market.

Basically, GDP is an important measure of the health of an economy, and it also reflects the standard of living of that nation. It therefore holds an important position among economic indicators for any country.

The GDP has significant economic implications, with a higher GDP number resulting as businesses hire workers and expand to meet increasing demand for their products. Goods produced are exported, and the country shows an expanding economy.

The GDP typically indicates a healthy economy with growth running at a 3.0% to 3.5% rate, and such growth levels are moderate enough to not signal an excessive inflation risk.

Furthermore, a declining GDP generally signals an economic downturn, with lower demand for products, increasing unemployment and a slowdown in the business cycle.

The GDP can be reported in either real or nominal terms, real GDP being adjusted for inflation. GDP actually has three releases, as an Advanced, Preliminary, and Final figure.

Gross domestic product (GDP) is an economic measure that adds up the value of all the goods and services produced in a country over a specific time period.

Gross Domestic Product is defined to be the financial measure of the total of all goods and services created within a countries borders, in one year. A measure of economic output.

Developed in 1934 by Simon Kuznets, the Gross Domestic Product, known commonly by the initials G.D.P., measures the output and production of finished goods in a particular country’s economy.

sually, GDP is measured in three different time periods; monthly, quarterly and annually. This enables economists and traders to get an accurate picture of the overall health of the economy.

GDP encompasses personal consumption, wholesale inventories, and retail sales. Because each of these components is already measured and released in separate announcements early, GDP is often regarded as “backward looking.” This means that the market may have already priced in GDP based on the other economic releases that make up this number.

Forex traders are most interested in GDP as it is a complete health “report card” for a particular country’s economy. A country is “rewarded” for a high GDP with a higher value of their currency.