The United States (US) gross domestic product (GDP) annual rate increased 1.9 percent in the first quarter of 2012 from the fourth quarter of 2011, according to the "second" estimate provided by the Bureau of Economic Analysis on Thursday. The fourth quarter of 2011 experienced a GDP increase of 3.0 percent. The GDP estimate released today is based on more complete data than the previous “advance” estimate released last month at 2.2 percent. The first quarter’s gain in GDP reflected positive contributions from personal consumption expenditures (PCE), exports, residential fixed investment, private inventory investment, and nonresidential fixed investment. Additions were offset by negative contributions from government spending alongside increased imports, which serve as a subtraction to the GDP calculation. The slowing of GDP growth in the first quarter of the year resulted mainly from a deceleration in nonresidential fixed investment that was partly offset by accelerations in exports and in PCE.
Despite a day of negative sentiment from Europe and US, the EURUSD found support near 1.2360 as we head into Non Farm Payrolls report tomorrow. If the report is better than expected, EURUSD might bounce higher towards 1.2500. On the other hand, if the report comes below expectations, we expect the EURUSD to target 1.2260.
Eugene Ross, Analyst
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