Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is a measure of the total value of final goods and services produced within a country’s borders during a stated period, usually a quarter or year. It is a widely used indicator of economic activity and growth.

GDP reports may show growth or contraction compared with the previous quarter or the same period a year earlier. They can be released as preliminary estimates and later revised. GDP differs from Gross National Product (GNP), which is based on national ownership rather than production within a country.

Example: If euro area GDP is reported weaker than markets expected, traders may reassess the economic outlook for the euro. EUR/USD may move as participants also consider European Central Bank interest-rate expectations.

GDP can influence expectations for interest rates and the overall economic outlook, both of which can affect demand for a country’s currency.

• GDP is a lagging economic indicator because it describes activity that has already occurred.
• Market reaction often depends on the result relative to forecasts, not only whether GDP rose or fell.
• Initial GDP estimates may be revised in later releases.

Educational guidance only — never a trading signal or recommendation.