The US economy expanded by 1.6% q/q in the first three months of the year, missing estimates of 2.5% and down from 3.4% in Q4 2023. US dollar firms after PCE figures nudge higher.
While the lower-than-expected GDP figure would bring rate cuts back to the fore, the price index for gross domestic production rose sharply compared to the prior quarter., ‘Theprice index for gross domestic purchasesincreased 3.1 percent in the first quarter, compared with an increase of 1.9 percent in the fourth quarter . Thepersonal consumption expenditures price indexincreased 3.4 percent, compared with an increase of 1.8 percent.
The US dollar fell on the GDP figure but turned around straight away as traders factored in the PCE increases. Today’s release is unlikely to see US rate cuts bought forward with the market now fully priced for a 25 bp cut in November.– bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via TwitterLeveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
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