Strong Gains for the Dollar After a Sharp Upward Revision to GDP

Group 1 - The final Q2 GDP showed one of the largest upward revisions in recent years, indicating the strongest growth in nearly two years, primarily driven by consumer spending [1][3] - The contraction in the first quarter was attributed to higher imports as companies stockpiled goods ahead of new tariffs, but the positive Q2 results were not solely due to a decline in imports [2][3] - Personal consumption expenditure rose by 2.5% in Q2, significantly higher than the second estimate of 1.6%, suggesting that concerns about a downturn in the USA may be premature [3] Group 2 - Initial jobless claims on 25 September were significantly lower than consensus, indicating a potentially stronger job market than previously perceived [4] - The likelihood of a Fed rate cut on 29 October remains high at around 85%, but the probability of cuts at future meetings has decreased by over 20% compared to the previous week [5] - The euro-dollar has declined recently as sentiment on the dollar improved, supported by the upward revision to GDP and lower initial jobless claims [7]