The US Dollar strengthens following positive revisions in the second estimate of US GDP data
- The US Dollar is trading robustly, recovering nearly all the losses sustained last week.
- With a risk-on sentiment prevailing in the markets, the US Dollar is making significant strides.
- The US Dollar Index has surged into the 101 region and appears poised to maintain these gains through Thursday.
The US Dollar (USD) is trading significantly stronger, reversing losses from last week in several currency pairs. This is particularly evident in the USD against the Euro (EUR), where the Euro has weakened further due to soft European inflation data. The upbeat US economic data has pushed the Euro even lower, with the pair now trading at levels seen early last week, just before the Jackson Hole Symposium.
On the US economic calendar, the second estimate of the Gross Domestic Product for the second quarter showed positive results. Additionally, the weekly jobless claims report indicated continued strength, although continuing claims have started to edge up slightly.
Meanwhile, US Initial Jobless Claims for the week ending August 23 came in at 231K, nearly matching the estimates of 232K and the previous figure of 233K, which was revised upward from 232K.
Inflation data from both Germany and Spain revealed a deepening disinflation trend, with some German provinces even reporting monthly price declines. This led to a sharp drop in the Euro (EUR) against the US Dollar (USD), wiping out nearly all of last week’s gains.
Equities are surging, with the German DAX in Europe rising close to 1%. US markets are also upbeat, with all three major indices gaining around 0.5%.
The US 10-year benchmark yield is trading at 3.87%, testing this week’s highs.