Gross Domestic product

GDP is a major news release that Forex traders can use as a barometer to measure economic strength and weakness as well as interest rate expectations. Since Forex is traded in pairs, traders can pair a strong economy with high GDP with a weak economy with low GDP to find powerful trends.

GDP is the broadest, most comprehensive barometer of a country's overall economic condition. Sum of all the market values of all final goods and services produced in a country (domestically) during a specific period using that country's resources, regardless of the ownership of the resources.

Each GDP report contains data on the following:

Personal income & consumption expenditures
Corporate profits
National income
Inflation

Some traders and economist attempt to calculate the output gap of the GDP. The output gap is the difference between the economy's actual and potential levels of production. This difference yields insight into important economic conditions, such as employment and inflation.

he gross domestic product (GDP) is one of the primary macroeconomic indicators used to assess the condition of a country’s economy. It represents the total monetary value of all goods and services produced over a specific time period – the size of the economy.

Economic production and growth, what GDP represents, has a large impact on nearly everyone within that economy. When the economy is healthy, you will typically observe low unemployment and higher wages as businesses demand labor to meet the growing economy.

There are three basic types of market reactions an investor or trader can expect when it comes to release of GDP figures.
1) 1. A lower-than-expected GDP reading will generally cause a sell-off of the domestic currency relative to its counterparts.
2) A reading matching expectations will require additional analysis and comparison by market players.
3) A faster-than-expected economic expansion will generally support the underlying currency versus its trading peers.

Markets respond the most to the release of GDP figures from the United States, Euro zone, Great Britain and Japan, because the economic dynamics of these countries have the strongest effect on overall market sentiment and trends.

traders should diligently monitor the GDP numbers of these countries but the greatest attention should be paid toward growth figures from countries whose currencies you trade.

The GDP captures the overall size of a country's economy by measuring the final value of all goods and services. Some items are excluded, such as services to benefit self that does not contribute to the economy; gifts; underground activities, etc.

The Gross Domestic Product or GDP is the net worth of the sum of all that is produced in a country along with services, investments, public expenditures, government outlays, and the balance of trade measured annually.

In essence, the GDP measures the national standard of living as well as the overall economic health in the country and so holds an important place among the fundamental indicators of any country.

In economics, the gross domestic product (GDP) is a measure of the amount of the economic production of a particular territory in financial capital terms during a specific time period. It is one of the measures of national income and output

GDP is defined as the total value of all goods and services produced within that territory during a specified period (most commonly, per year).

GDP differs from gross national product in excluding inter-country income transfers, in effect attributing to a territory the product generated within it rather than the incomes received in it.