What is the Gross Domestic Product (GDP)?

Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced within a country's borders in a period — usually a quarter or a year. It is the broadest scorecard of an economy's size and growth, and a core input for central banks setting policy.

Why does it move the market?

A strong, growing GDP signals a robust economy: it can attract foreign investment and push the central bank toward higher interest rates to keep inflation in check — both of which tend to strengthen the currency.

A weak or contracting GDP signals slowdown or recession, where the central bank may cut rates to stimulate growth, making the currency less attractive. As always, the reaction is driven by the actual figure versus the consensus forecast.

When is it released?

GDP is published quarterly by national statistical agencies, usually several weeks after the quarter ends. Many countries issue multiple readings for the same quarter — the US, for example, releases "Advance", "Second" and "Final" estimates. The "Advance" reading tends to move the market most: it is the first full look at the quarter and sets initial expectations.

How does a trader read it?

The headline number matters less than how it compares to the consensus forecast — above forecast is generally bullish for the currency, below forecast bearish. Traders also watch the annual growth rate to gauge the pace of expansion, and the components (consumer spending, business investment, government spending) to see what is actually driving the economy.