In the fourth quarter of 2024, the US GDP is predicted to expand at an annualized rate of 2.8%.
It is anticipated that the US economy will continue to expand at a steady rate.
Due to prevailing risk aversion, the US dollar is currently recovering.
The preliminary estimate of the US Gross Domestic Product (GDP) for the October-December quarter is set to be released by the US Bureau of Economic Analysis (BEA) on Thursday. Analysts predict that the report will show an annualized economic growth rate of 2.8%, which is marginally less than the 3.1% recorded in the year's third quarter.
What to anticipate from this time's GDP figures
As the final gauge of the state of the US economy, the BEA's preliminary GDP release is the most significant for financial markets. The report includes new Personal Consumption Expenditures (PCE)-Price Index numbers, the Fed's preferred inflation indicator, in addition to growth data.
Financial markets are still processing the Fed's monetary policy decision to hold interest rates steady ahead of GDP and PCE updates, so the current release is a little complicated.
The Fed's most recent Summary of Economic Projections (SEP), also known as a dot plot, was released back in December. It revealed revisions to 2025 year-end growth to 2.1% from 2% and to core inflation to 2.5% from 2.1%. In general, the most recent SEP indicated that policymakers anticipated that inflation would continue to rise above their 2% target for some time to come and that economic expansion would continue.
Market participants expect the Q4 core PCE Price Index to print at 2.5%, higher than the 2.2% reported in Q3, in addition to the headline GDP reading.
The GDP Price Index, which tracks changes in the prices of domestically produced goods and services, including exports but excluding imports, is another feature of the report. This index gives a clear picture of how GDP is impacted by inflation. After rising 1.9% in the third quarter, the GDP Price Index is predicted to rise 2.5% in the fourth quarter.
Notably, the Federal Reserve Bank of Atlanta's GDPNow model predicts real GDP growth in the fourth quarter of 2024 will be 3.2% on Tuesday, up from 3.0% on January 17.
How might the GDP print impact the USD and when will it be released?
On Wednesday, the US GDP report will be released at 13:30 GMT. The US Dollar's (USD) value may be impacted by the headline real GDP figure, changes in private domestic purchases, the GDP Price Index, and the Q4 PCE Price Index figures.
While depressing data could have the opposite effect on the US currency, a better-than-expected GDP headline could bolster the Fed's dovish case and put pressure on the USD.
Analysis
Despite a recovery at the start of the week in a risk-averse atmosphere, the US Dollar Index (DXY) is still well below its mid-January monthly high of 110.18. However, technical readings in the daily chart indicate that the current advance is not gaining momentum. The intraday high of 108.50 on January 23 acts as a barrier right before the 109.00 mark. Market participants will consider the 109.40–109.50 range as a possible bullish target if the index surpasses the latter.
Despite a recovery at the start of the week in a risk-averse atmosphere, the US Dollar Index (DXY) is still well below its mid-January monthly high of 110.18. However, technical readings in the daily chart indicate that the current advance is not gaining momentum. The intraday high of 108.50 on January 23 acts as a barrier right before the 109.00 mark. Market participants will consider the 109.40–109.50 range as a possible bullish target if the index surpasses the latter. A drop below the intraday low of 107.75 on January 29 reveals the monthly bottom at 106.97. Although further declines are unlikely in the near future, US dollar dips could be viewed as buying opportunities given the risk-averse climate.
It is anticipated that the US economy will continue to expand at a steady rate.
Due to prevailing risk aversion, the US dollar is currently recovering.
The preliminary estimate of the US Gross Domestic Product (GDP) for the October-December quarter is set to be released by the US Bureau of Economic Analysis (BEA) on Thursday. Analysts predict that the report will show an annualized economic growth rate of 2.8%, which is marginally less than the 3.1% recorded in the year's third quarter.
What to anticipate from this time's GDP figures
As the final gauge of the state of the US economy, the BEA's preliminary GDP release is the most significant for financial markets. The report includes new Personal Consumption Expenditures (PCE)-Price Index numbers, the Fed's preferred inflation indicator, in addition to growth data.
Financial markets are still processing the Fed's monetary policy decision to hold interest rates steady ahead of GDP and PCE updates, so the current release is a little complicated.
The Fed's most recent Summary of Economic Projections (SEP), also known as a dot plot, was released back in December. It revealed revisions to 2025 year-end growth to 2.1% from 2% and to core inflation to 2.5% from 2.1%. In general, the most recent SEP indicated that policymakers anticipated that inflation would continue to rise above their 2% target for some time to come and that economic expansion would continue.
Market participants expect the Q4 core PCE Price Index to print at 2.5%, higher than the 2.2% reported in Q3, in addition to the headline GDP reading.
The GDP Price Index, which tracks changes in the prices of domestically produced goods and services, including exports but excluding imports, is another feature of the report. This index gives a clear picture of how GDP is impacted by inflation. After rising 1.9% in the third quarter, the GDP Price Index is predicted to rise 2.5% in the fourth quarter.
Notably, the Federal Reserve Bank of Atlanta's GDPNow model predicts real GDP growth in the fourth quarter of 2024 will be 3.2% on Tuesday, up from 3.0% on January 17.
How might the GDP print impact the USD and when will it be released?
On Wednesday, the US GDP report will be released at 13:30 GMT. The US Dollar's (USD) value may be impacted by the headline real GDP figure, changes in private domestic purchases, the GDP Price Index, and the Q4 PCE Price Index figures.
While depressing data could have the opposite effect on the US currency, a better-than-expected GDP headline could bolster the Fed's dovish case and put pressure on the USD.
Analysis
Despite a recovery at the start of the week in a risk-averse atmosphere, the US Dollar Index (DXY) is still well below its mid-January monthly high of 110.18. However, technical readings in the daily chart indicate that the current advance is not gaining momentum. The intraday high of 108.50 on January 23 acts as a barrier right before the 109.00 mark. Market participants will consider the 109.40–109.50 range as a possible bullish target if the index surpasses the latter.
Despite a recovery at the start of the week in a risk-averse atmosphere, the US Dollar Index (DXY) is still well below its mid-January monthly high of 110.18. However, technical readings in the daily chart indicate that the current advance is not gaining momentum. The intraday high of 108.50 on January 23 acts as a barrier right before the 109.00 mark. Market participants will consider the 109.40–109.50 range as a possible bullish target if the index surpasses the latter. A drop below the intraday low of 107.75 on January 29 reveals the monthly bottom at 106.97. Although further declines are unlikely in the near future, US dollar dips could be viewed as buying opportunities given the risk-averse climate.
