The US dollar made up some ground against the euro and Japanese Yen Wednesday, following the release of upbeat third-quarter GDP data.
The second release of the data showed GDP growth in the third-quarter was 3.3%, stronger than previously reported in the preliminary release last month. It was also the fastest pace of growth in three years.
The Eurodollar came under pressure following the release, sliding to $1.18203 from $1.18245 just before the data. Against the yen, meanwhile, the dollar rose from Y111.970 to Y112.118.
By 1415 BST, Eurodollar was trading at $1.18396 while against the yen, the dollar was worth Y111.912.
US economy powers ahead
The upward GDP revision from a previous print of 3.0%, surprised the markets which had anticipated the number would improve to 3.2%.
The details of the data showed that although consumer spending moderated a little, business investment more than offset that setback. Higher Government spending also boosted the pace of growth.
It’s likely the slower pace of consumer spending was in part due to the effects of hurricanes Irma and Harvey that struck the US during the period in question. Slow wage growth, such as is being experienced in the UK, also likely weighed on consumers appetite to spend.
Data supports Fed rate hike
For all the discussions over inflation, Wednesday’s strong GDP print is supportive of a December Fed interest rate hike. However, the outlook further ahead remains just as clouded as it did before the data were published.
In the meantime, current Federal Reserve Chair, Janet Yellen will give what will likely be her final address to congress, later Wednesday. She is expected to be mostly positive on the economy.
However, she is expected to point to some much-needed structural reforms to help the economy grow strongly over the longer term.
"To generate a sustained boost in economic growth without causing inflation that is too high, we will need to address these underlying causes," Yellen will say, according to, according to prepared remarks.
Yellen will step down as Fed chair in February 2018, to be replaced by current Fed Governor, Jerome Powell.