The Commerce Department said Thursday that U.S. gross domestic product rose at a 3.4% annual rate in the third quarter
The U.S. economy demonstrated stronger-than-expected performance in the third quarter, with GDP growth clocking in at 3.4%, significantly above the 3.1% forecast by economists surveyed by The Wall Street Journal. This positive surprise may indicate robust consumer spending and resilience in economic activity, helping to bolster the USD's status amidst global uncertainties. The revision upwards of growth expectations could prompt traders to reassess their positions ahead of forthcoming economic data releases and central bank signals.
Where it sits in our coverage
Our consensus EUR/USD target is currently set at 1.075, with a range from 1.04 at the bearish end to 1.12 at the bullish end, reflecting the divergent views among major firms. In this context, JPMorgan's outlook aligns closely with trends suggested by the recent GDP data, supporting a stronger dollar outlook in the near term.
How firms align
JPMorgan is positioned as aligned with the recent GDP growth trajectory, forecasting a target of 1.10 for EUR/USD as of March 2026. On the contrary, BofA's more cautious stance at 1.04 reflects skepticism about the sustainability of this growth acceleration.
What the data shows
Recent forecasts from our coverage suggest a shift in sentiment toward a more bullish outlook for the dollar. For additional insights, see our research on USD dynamics at /research/usd-outlook-2023.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01U.S. GDP grew by 3.4% in Q3, outpacing expectations.
- 02Traders may realign positions as growth data influences sentiment.
- 03A continued strong performance could see the USD test levels around 1.10.
Market implications
Market participants should monitor the upcoming jobs report and inflation data, as these will be crucial in gauging the sustainability of economic growth. The current consensus target of 1.075 may be revisited depending on these releases.
Risks to this view
Should any significant economic indicators, such as inflation or employment figures, deviate negatively from expectations, this could undermine the recent growth narrative and force a re-evaluation of the dollar's strength.
Sentiment by currency
USD+EUR JPY GBPComposite USD score: +0.65
Sources & References
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