The US dollar kicked higher on the GDP headline but a couple caveats (and a dove at the Fed) have kept the dollar in check.
The caveats:
- Inventories were high and added 1.66 pp to GDP
- Revisions to 2011-2013 data lowered the base
Ultimately, I think the revisions to Q1 and the strong Q2 number easily outweigh those concerns but the market is wary of Yellen. She’s a major-league dove and every US dollar bull has been burned by believing she would be hawkish before.
US GDP annualized
That said, USD/JPY is beginning to pick up and is at a fresh high at 102.58.
Strong demand at 1.3770 has held EUR/USD so far. More bids are in the 1.3360 zone and there’s a rumored barrier at 1.3350.
