Fed Takes Steam Out of U.S. Dollar Rally

The U.S. dollar held below a 10-month peak against a basket of major currencies early on Thursday, having soared at first on upbeat growth data only to have a dovish Federal Reserve take some steam out of the rally.

The dollar index last traded at 81.422 after rising as far as 81.545 – a high last seen in mid-September. Still, the index is up more than 2 percent so far this month, on track for its biggest monthly gain in over a year.

Dollar bulls took heart after the U.S. economy rebounded sharply in the second quarter, with gross domestic product (GDP) motoring at a 4.0 percent annualized pace.  That outcome was well above the 3.0 percent consensus and a smart turnaround from a 2.1 percent contraction in the first quarter.

CNBC

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