The dollar index (DXY00) fell by -0.22% despite a stronger-than-expected US GDP report, with reduced odds for Fed easing. The market lowered the chances of a -25 bp rate cut to 13% at the next FOMC meeting.

US Q3 real GDP rose by +4.3%, exceeding expectations of +3.3% and the Q2 rate of +2.5%. The Q3 core PCE Price Index rose by +2.9%, in line with expectations but up from Q2’s +2.6%.

The Dec US consumer confidence index dropped to 89.1 from Nov’s revised 92.9, below expectations of 91.0. The Dec Philadelphia Fed non-manufacturing index also declined to -16.8 from -16.3 in Nov.

Oct durable goods orders fell by -2.2% m/m, worse than expectations of -1.5%. Nov US industrial production also decreased by -0.1% m/m, slightly below market expectations of +0.1%.

EUR/USD (^EURUSD) rose by +0.11% on dollar weakness supported by ECB member comments. The ECB is seen as satisfied with the current outlook for no interest rate cuts.

Swaps show a 0% chance of a -25 bp rate cut by the ECB at the next policy meeting on February 5. USD/JPY (^USDJPY) is down by -0.39% as the yen strengthened after Japan’s recent rate hike.

February COMEX gold (GCG26) and March COMEX silver (SIH26) reached all-time highs today. Precious metals are boosted by geopolitical risks and the FOMC’s liquidity injections into the financial system.

Read more at Yahoo Finance: Dollar Falls Despite Strong US GDP Report