USD to become more attractive as the gap between US GDP and other currency areas widens – Commerzbank
Source Fxstreet
On Thursday, the US Bureau of Economic Analysis published the figures for the US GDP in Q4/2023. Economists at Commerzbank analyze Dollar’s outlook after another clear upside surprise on the US macro data front.
US Q4 GDP jumped another solid 3.3%
Thursday's figure (+3.3% annualized, price and seasonally adjusted) makes it quite clear that the stellar performance of the US economy continued in the final quarter of last year. It is particularly ‘stellar’ compared to the performance of other currency areas, even if their Q4/2023 figures are still largely missing.
This benefits the Dollar. For two reasons: (1) A robust economy makes it easier for the Fed to remain restrictive for a while longer, i.e. not to cut its key interest rate just yet. (2) Japan's GDP continues to crawl around at pre-corona levels, while Europe's GDP appears to have been stagnant for some time. Dynamic US growth is the big exception among the major currency areas.
It is possible to believe that the US economy has a structural growth advantage in the post-Corona world. If this were the case, it would be an additional argument in favor of the Dollar. It is far from clear whether this is the case. But every quarter that the gap between the US GDP and the GDP trajectories of other currency areas widens, this view becomes more attractive.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
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