GDP (Gross Domestic Product)

GDP is the total value of all goods and services an economy produces over a period, reported quarter-over-quarter and usually annualized. It's the single broadest growth number that exists, which is exactly why it's also one of the slowest and most backward-looking -- by the time it's released, the quarter it describes is already over.

Stronger-than-expected growth generally supports a currency by raising both growth and interest-rate expectations together -- a hot economy gives a central bank more room to keep rates high (or raise them) without tipping into recession. Because it lags, GDP surprises tend to matter most when they contradict the story that faster-moving data (PMIs, jobs reports) had already been telling.

Suppose annualized quarterly GDP is expected at 2.0% and comes in at 2.8%. That beat, on its own, generally supports the currency -- but if PMIs and employment data over the same quarter had already been signaling strength, the GDP print mostly just confirms what the market had priced in already, and the reaction is muted. GDP surprises hit hardest when they're a genuine surprise, not a delayed echo of data everyone already saw.