US GDP: Early crash to trigger more Fed action sending the dollar down

Coronavirus has taken an initial toll on the US economy, which squeezed by an annualized pace of 4.8%. The dollar is set to decline and stocks to advance, FXStreet’s analyst Yohay Elam reports.

Key quotes

“The US economy squeezed by 4.8% annualized. Officials admit the data is incomplete, it was released later than expected, and one data provider erroneously published a positive figure.”

“Personal consumption tumbled by 7.6% annualized, far worse than a slide of 3.6%. America's economy is centered around consumption and if it dropped so sharply when people were stockpiling, it will likely get far worse.” 

“Given the severity of the data, the Fed may opt to further stimulate the economy and print more money. That is good news for stocks, which benefit from an abundance of liquidity, and detrimental for the dollar. 

“Other winners may be gold, and the yen, which recently has a mixed record as a safe-haven, may be a loser.”