Dollar Surges Amid Revised GDP Growth, Impact on Fed Decisions Looms

The dollar strengthened against other major currencies after the U.S. economy showed robust growth in the second quarter, higher than anticipated. This prompted speculation on future Federal Reserve interest rate cuts. Traders and policymakers remain focused on upcoming economic data to gauge further monetary policy adjustments.

The U.S. dollar made gains against the euro and yen on Thursday, buoyed by reports indicating a faster-than-expected economic growth rate in the second quarter. This has led to speculation that the Federal Reserve might restrain future interest rate cuts.

The Commerce Department announced a significant upward revision in the U.S. gross domestic product, rising to 3.8% from the initially reported 3.3% for April through June. This growth contrasted with forecasts from economists, contributing to the dollar's upward trajectory, with a 0.33% rise against the yen and a drop in the euro to a two-week low against the dollar.

Amidst this, traders are keenly watching the Federal Reserve's next moves. With last week's expected rate cuts already executed, future decisions will heavily depend on forthcoming economic indicators. Meanwhile, Fed officials continue to voice differing opinions on policy paths, influenced by current labor market conditions and inflation trends.

(With inputs from agencies.)