Mecklai Graph: Will US Q4 GDP surprise?

Mecklai graph of the day - Will US GDP surprise?

The Q4 US GDP growth rate is scheduled to be released today at 07:00 PM IST. The market expects the US economy to expand at 3% in the last quarter of 2011 which, if comes out as expected, would be the highest growth rate in 2011. Meanwhile, if the actual figure exceeds the market expectation, the Dollar could recover some of its lost ground against the G7 basket, especially against its safe haven counterparts - Swiss Franc and Japanese Yen.

However, if the data prints in weaker-than-expected, speculation regarding the possibility of QE3 will start to resurface. This in turn would be negative to Dollar against the Yen and Franc. Meanwhile, movement in USD against its high-yielding counterparts (Euro and Sterling) post the release of GDP data will depend based on how risk appetite prevails during the US session.

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