US Dollar Rallies After GDP Data Shows Faster Growth Than Expected
Positive Data Pushes Dollar Higher
The US dollar rebounded on Wednesday from a 3-month low as investors took stock after four consecutive days of losses. This was supported by data revealing that the US economy grew faster than initially estimated in the third quarter.
GDP Growth Boosts Dollar
The US dollar gained ground against most major currencies, except the Swiss franc and New Zealand dollar. Despite this, the greenback was still on track to record its biggest monthly decline in a year, largely due to expectations of Federal Reserve rate cuts by the first half of 2024.
Faster Expansion and Rate Cut Bets
The dollar continued to strengthen following the news that US gross domestic product expanded at a 5.2% annualized rate in the last quarter, higher than the previously reported 4.9%. Economists had expected GDP growth to be revised up to 5.0%. This positive data has challenged the narrative of an impending rate cut.
Market Reactions and Currency Movements
U.S. rate futures showed an increased likelihood of a rate cut starting in March, following the GDP data. The dollar index, which tracks the currency against six peers, was up 0.3% at 102.87, set for its largest daily gain in a week. Meanwhile, the euro fell 0.2% versus the dollar to $1.0968.
Global Currency Trends
New Zealand’s dollar was last up 0.1% at US$0.6143, Japan’s yen rose slightly on the day, and China’s yuan finished the domestic session at 7.1246 per dollar, the strongest closing price since June 16.
Currency Bid Prices
- Dollar index: 102.9200
- Euro/Dollar: $1.0965
- Dollar/Yen: 147.3150
- Euro/Yen: 161.52
- Dollar/Swiss: 0.8755
- Sterling/Dollar: $1.2672
- Dollar/Canadian: 1.3614
- Aussie/Dollar: $0.6608
- Euro/Swiss: 0.9598
- Euro/Sterling: 0.8650
- NZ: $0.6141
- Dollar/Norway: 10.6630
- Euro/Norway: 11.6958
- Dollar/Sweden: 10.3739
- Euro/Sweden: 11.3754
