U.S. Dollar Rises Against Euro and Yen After Strong GDP Data

The U.S. dollar gained against major currencies on Thursday after new data showed the economy grew faster than previously estimated in the second quarter. The stronger growth outlook could limit the scope for future Federal Reserve interest rate cuts.

U.S. GDP Revised Higher

The Commerce Department reported that U.S. GDP expanded 3.8% from April to June, above the 3.3% initially reported. Economists had not expected a revision.

Following the release, the dollar strengthened 0.33% to 149.39 yen, its highest since August 1. The euro fell 0.39% to $1.1691, hitting a two-week low.

The dollar index, which tracks the greenback against six major peers, rose 0.52% to 98.34, near a two-week high.

Market Reaction and Fed Outlook

Steve Englander, head of G10 FX research at Standard Chartered, noted that many traders were short on the dollar, and the stronger-than-expected GDP helped fuel the rebound.

He added that while the labor market shows signs of weakness, GDP and output remain strong. This could push the Fed to slow the pace of rate cuts.

Traders are currently pricing in at least two more rate cuts this year, but Fed Chair Jerome Powell has signaled that decisions will depend on upcoming economic data.

Treasury Yields and Wall Street

U.S. Treasury yields rose across maturities. The 10-year yield increased 3.6 basis points to 4.183%, while the 2-year yield—closely tied to Fed policy expectations—rose 5.7 basis points.

On Wall Street, all three major indexes—the S&P 500, Dow Jones, and Nasdaq—finished lower.

Dollar Gains Against Swiss Franc

The dollar also climbed against the Swiss franc, rising 0.64% to 0.80. The move came after the Swiss National Bank kept rates unchanged at zero and warned that Trump’s tariffs had weakened the Swiss economic outlook for 2026.