Market Watch: Preliminary U.S. GDP Data

Markets are awaiting the release of the preliminary U.S. GDP for the fourth quarter of 2023, scheduled for 17:30 Dubai time. Expectations indicate that GDP will remain stable at previous levels of 3.3%.


If the actual reading follows expectations, this indicates that the U.S. economy remains strong despite the tight monetary policy taken by the Federal Reserve. As a result, the U.S. economy may avoid entering into a recession despite keeping interest rates higher for longer than expected.


How Could the GDP Data Impact Markets?

If the reading comes as expected or higher than 3.3%, analysts expect positive moves for the U.S. dollar and potentially negative effects for gold and stocks. A reading of this nature may offer increased confidence to the Federal Reserve to keep interest rates high for a more extended period until inflation stabilizes at 2%.


If GDP declines in the actual reading, analysts suggest this could negatively affect the dollar and positively affect gold and stocks. This is because a weaker economic growth reading could indicate that the U.S. economy is beginning to feel the effects of higher interest rates, leading the Fed to potentially start reducing interest rates soon.




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