“Real gross domestic product — the output of goods and services produced by labor and property
located in the United States — increased at an annual rate of 5.7 percent in the fourth quarter of 2009,
(that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the
Bureau of Economic Analysis. In the third quarter, real GDP increased 2.2 percent.”
Expectations were +4.5%, so this report came in very strong.
A good sign within the data is that US exports increased significantly. “Real exports of goods and services increased 18.1 percent in the fourth quarter, compared with an increase of 17.8 percent in the third.”
Source: Bureau of Economic Analysis
The US dollar strengthened significantly on the news. US stocks opened positive and rallied early on. The USD has had a strong week as the correction has sustained itself. In the short term cautiously look to buy the dollar. However, longer term this USD strength is helping create setups for our USD bearish bias. Look for where the USD may top out and sell it against stronger currencies such as AUD or CAD.
