The final Q2 GDP on 25 September had a significant upward revision, showing the strongest growth in nearly two years. Consumer spending was the primary reason for the positive revision, with personal consumption expenditure rising 2.5% in Q2. Jobless claims on the same day were significantly lower, indicating a potentially stronger job market.

The likelihood of a Fed rate cut on 29 October has slightly decreased, but the probability of cuts at future meetings has also dropped. Despite this, the dollar has strengthened against the euro, with the euro-dollar pair declining in recent days. The carry trade continues to favor the dollar, potentially into the first quarter of 2026.

The dollar’s gains came after better jobless claims and an upward revision in Q2 GDP. The labor market in the USA seems stronger than previously thought, supporting the dollar. The Fed is still expected to cut rates twice more this year. Meanwhile, the Bank of England’s MPC shows conflicting signals about potential rate cuts.

The euro-dollar pair broke below $1.34 on 25 September, potentially finding support at $1.33 or the 200 SMA if there’s a further decline. The 23.6% weekly Fibonacci retracement around $1.15 could be a target for sellers. Traders are watching NFP data and other key releases for further direction on the pair.

Read more at Yahoo Finance: Strong Gains for the Dollar After a Sharp Upward Revision to GDP