The U.S. dollar has gained strength across the board, bolstered by a stronger-than-expected GDP report and jobless claims that met expectations. The robust GDP growth figures, especially the 2.9% increase in consumer spending (which surpassed the 2.0% forecast), indicate a resilient economy with healthy consumer demand.Given these strong economic indicators, it seems unlikely that the Federal Reserve will opt for a 50 basis point rate cut in September, even if future NFP reports show weaker job growth. Market pricing now reflects a reduced probability of such a rate cut, dropping to a 32% chance from 36% yesterday.

Price Action in the Forex market

The recent economic data has notably impacted currency markets, particularly the USD/JPY pair, which has surged by 100 pips following the release of the figures. Other major currency pairs have also seen movement, with shifts of approximately 30-40 pips, reflecting the broader market reaction to the strong U.S. economic data.