Dollar Strengthens as U.S. GDP Surprises and Fed Meeting Looms
The dollar gained against major currencies after U.S. GDP data revealed stronger-than-expected growth, ahead of the Federal Reserve's policy decision. Despite President Trump's pressure to lower interest rates, the Fed is expected to maintain them. Trade agreements and market reactions add dynamic to global currency shifts.
The dollar advanced against major currencies on Wednesday, buoyed by stronger-than-expected U.S. GDP figures and anticipation surrounding the Federal Reserve's imminent policy decision. U.S. economic growth rebounded significantly in the second quarter, exceeding expectations with a 3% expansion, compared to the 2.4% forecasted by Reuters' poll of economists.
Despite persistent calls from President Donald Trump to cut interest rates, the Federal Reserve is widely predicted to keep rates steady. Following the GDP announcement, the euro extended its decline against the dollar, falling to $1.1471, marking its fifth consecutive session of losses and reaching its lowest point since late June.
Attention now shifts to trade negotiations, particularly between China and the U.S. Despite a 90-day tariff truce extension, Trump imposed a 25% tariff on Indian imports, indicating pressure on India for more favorable trade terms. Meanwhile, a new trade deal with Japan suggests potential interest rate hikes by the Bank of Japan.
(With inputs from agencies.)
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