USD: Data softens growth tone – TD Securities

💡 DMK Insight

Q4 GDP growth slowing to 1.4% is a red flag for traders: here’s why. Weak government spending is a significant factor, indicating potential headwinds for consumer confidence and overall economic activity. This slowdown could prompt the Fed to reconsider its interest rate strategy, impacting both forex and crypto markets. If the Fed leans towards a dovish stance, we might see a weaker dollar, which could boost crypto prices as investors seek alternative assets. Keep an eye on the 1.4% growth as a critical level; if it dips further, expect volatility across risk assets. On the flip side, if government spending rebounds, it could stabilize growth and support the dollar, leading to a potential sell-off in crypto. Watch for upcoming economic indicators and Fed statements that could provide clarity on the direction of monetary policy. The immediate focus should be on how this data influences market sentiment in the coming weeks, especially around key economic releases.