Dollar Surges Amid Robust Economic Data, Paring Down Aggressive Fed Cut Bets

The dollar reached a one-week high against major currencies, set to break a five-week losing streak due to strong U.S. economic data. The euro neared a two-week low, while the yen held steady. U.S. GDP grew at a higher-than-expected 3.0% annualized rate, causing shifts in traders' rate cut bets.

The dollar traded near a one-week high versus major peers on Friday, set to break a five-week losing run following strong U.S. economic data that tempered expectations for aggressive Federal Reserve interest rate cuts.

The euro hovered near a two-week low against the dollar as slowing inflation in Germany and Spain bolstered the argument for European Central Bank easing. The yen remained close to the critical 145 per dollar level after weakening, influenced by a rise in U.S. Treasury yields.

Japan's currency showed little reaction to data revealing that core consumer prices in Tokyo jumped by 2.4% in August, surpassing the Bank of Japan's 2% target. However, a measure excluding energy costs climbed just 1.6%. Overnight U.S. data revealed that GDP rose at a 3.0% annualized rate in Q2, up from the previously reported 2.8%. Economists had anticipated no revision.

(With inputs from agencies.)