Dollar climbs to 3-week high despite GDP revision

The U.S. dollar on Thursday strengthened across the board against its G-10 and emerging market rivals, with bulls shrugging off a downward revision in fourth-quarter GDP data.

The ICE U.S. Dollar Index DXY, +0.18% was 0.5% stronger at 97.264, a level not seen in roughly three weeks, according to FactSet.

Another revised read of gross domestic product growth for the final quarter of 2018 was lowered to 2.2% — in line with market expectations — from a previous reading of 2.6%. The dollar gauge nevertheless held its gains. Ahead of the data release, market participants had expressed worry that the downward revision, although expected, could stir further concerns about lost momentum in the U.S. economy.

“The greenback powered through to a three-week high against most major currencies, ignoring fresh concerns of inversion in [the] further end of yield curves,” said Viash Sreemuntoo, corporate trader at

“The U.S. economy outlook should not change much following this morning’s releases. Expectations have already started to grow for the Fed to cut more than 25 basis points by the end of the year,” said Edward Moya, senior market analyst at Oanda. “Global growth concerns are hurting the U.S. economy and right now the market’s focus is still about seeing a trade deal get done between the two largest economies.

Jobless claims for the week ended March 23 fell to 211,000, less than expected. Pending home sales, meanwhile, cooled in February after a strong start to the year. Several Federal Reserve speakers are on the schedule as well.

Meanwhile, global bond yields remain in focus as concerns over global growth weighed on sentiment. The U.S. 10-year Treasury TMUBMUSD10Y, +0.89% last yielded 2.396%.

The British pound GBPUSD, -0.7581% weakened against its U.S. rival after U.K. lawmakers rejected all alternative Brexit plans late Wednesday. Before the vote, Prime Minister Theresa May promised to step down and let a new leader handle the transition negotiations if her party supports her withdrawal deal.

May’s deal was rejected earlier in March as well as in January, and speaker of the House of Commons, John Bercow, said the deal had to be modified before Parliament votes on it again. The European Union, meanwhile, agreed that if Parliament supports the deal, the U.K.’s exit deadline will be extended to May 22. If it is rejected again, Britain only has until April 12 to firm up its plans.

Sterling dropped to its lowest in more than two weeks on Thursday, last buying $1.3092, compared with $1.3191. The currency also slipped against the euro EURGBP, +0.7390% with one euro buying £0.8573, up 0.6%.

The euro-dollar pair EURUSD, -0.1512% was slightly weaker at $1.221, versus $1.1244 late Wednesday.

In emerging markets, Turkey’s lira USDTRY, +3.6206% was once again sharply lower against the U.S. dollar. The move follows multiple days of volatile trading amid ahead of local elections on the weekend. On Wednesday, the Turkish government prevented foreign banks from accessing the lira via swap transactions, which drove up borrowing costs and weighed on Turkish assets.

One dollar last bought 5.5503, up 4%.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya