Summary:
- US GDP growth for Q4 2017 revised lower to 2.5% (annualised)
- Fall in net exports the main laggard
- USD looking for second day of good gains
The US economy grew slightly slower than previously thought in the final quarter of last year, according to the latest data release. The preliminary, which is the second of three readings, print came in at 2.5% Q/Q (in annualised terms), down from the 2.6% seen from the advance figure. This decline was expected and whilst it is a downward revision, growth in this region seemingly remains at a fair clip.
The latest GDP figures showed a little pullback in growth with net exports weighing fairly heavily. However, the pace of expansion remains fairly healthy by historical standards. Source: xStation
Looking more closely at the components of growth it appears that a slight drop in investment (as shown by the purple bar in the above graphic) and to a greater extent net exports (green bar) have fallen from the previous period.
Despite this drop in growth the US dollar has reacted positively, moving to its highest level in almost 6 weeks in edging above 90.50. The Buck received a boost from a cautiously hawkish Powell yesterday and if the USD index (USDIDX on xStation) can make a move above the 90.70 level then a larger move higher becomes possible.
USD index has moved to its highest level in nearly 6 weeks and is probing the top of its recent range around 90.70. A clean break above here could lead to a sustained move higher with a symmetrical target above this range coming in at 93.10. Source: xStation