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Wednesday, November 29, 2006

Faster GDP Revs Up Sputtering Greenback

From Bloomberg today ...

Dollar Gains as U.S. Revises Third-Quarter GDP Growth Higher

Nov. 29 (Bloomberg) -- The dollar gained the most in
three weeks against the euro after a government report showed U.S. economic growth last quarter was quicker than previously estimated.

Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2.2 percent annual rate last quarter, beating the government's initial estimate last month of 1.6 percent growth. Economists expected 1.8 percent growth in the third quarter, based on the median estimate in a Bloomberg survey. GDP has slowed from a 2.6 percent clip in the second quarter.

XX My take -- well, maybe. The US dollar was overdue for a bounce anyway. I have to say I'm not impressed with the bounce it got off this GDP news -- maybe that's because even though 3rd quarter GDP was higher than expected, it's still a slowdown from the second quarter. I'd like for the greenback to bounce higher, and gold to go lower, so that we can get better entry into precious metal stocks. Will I get my wish? Stay tuned.

Oh, and one more thing. Even though this is a backward-looking statistic, higher GDP numbers will probably translate into higher oil prices. That will have to be balanced against the energy reports out today and tomorrow, but it could be interesting.

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