NextFin news, On Thursday, September 25, 2025, the US Dollar Index (DXY) climbed sharply above 98.20, driven by stronger-than-expected economic data from the United States. The Commerce Department revised the second-quarter GDP growth rate upward to an annualized 3.8%, up from the previously reported 3.3%, signaling continued economic resilience despite some labor market softening.
Simultaneously, weekly jobless claims fell to 218,000, down from 232,000 and below the forecasted 235,000, underscoring ongoing strength in the labor market. These data points collectively diminished market bets on aggressive Federal Reserve rate cuts in the near term.
The stronger economic indicators led to a rise in Treasury yields across the curve, with the 10-year yield increasing by 4.4 basis points to 4.191% and the 2-year yield, closely tied to Fed policy expectations, jumping 5.9 basis points to 3.657%. The 30-year bond yield also edged higher to 4.777%.
Following the data release, the US Dollar strengthened against major currencies, rising to 149.39 yen (+0.33%) and pushing the euro down 0.39% to $1.1691. The dollar also gained 0.64% versus the Swiss franc, reaching a two-week high after the Swiss National Bank maintained its zero interest rate policy.
Federal Reserve officials expressed differing views on the path of monetary policy. Kansas City Fed President Jeffrey Schmid defended the recent rate cut as necessary to protect the labor market, while Chicago Fed President Austan Goolsbee cautioned against further easing while inflation remains above target. Fed Chair Jerome Powell emphasized that employment risks remain central to policy decisions, indicating a data-dependent approach.
Technically, the DXY broke above its 50-day moving average at 98.025 and a key pivot level at 98.238, signaling renewed upside momentum. Market watchers are now focused on resistance levels at 98.635 and 98.834, which if surpassed, would confirm a bullish trend for the US dollar.
The upward GDP revision and strong labor data have complicated expectations for Federal Reserve easing, limiting the likelihood of aggressive rate cuts in the near future. Market participants are awaiting upcoming inflation data, including the core Personal Consumption Expenditures (PCE) Price Index, for further guidance on the Fed's policy direction.
Source: FXEmpire, Reuters (September 25, 2025)
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