US Dollar edges higher ahead of US GDP data, trades near 102.40

US Dollar Index (DXY) attempts to extend its gains on the second successive day, trading slightly higher near 102.40 during the European session on Thursday. The uptick in US Treasury yields might have ignited the strength of the US Dollar (USD). The 2-year and 10-year yields on US bond coupons stand higher at 4.37% and 3.86%, respectively, as of the latest update.

However, the Greenback received downward pressure due to the market sentiment about the Federal Reserve’s (Fed) dovish outlook over the interest rate trajectory in the first quarter of 2024. Several Fed members have dismissed the premature speculations of interest rate cuts any time sooner. New York Fed President John Williams has outright opposed the idea, while San Francisco Fed President Mary Daly considers predictions on policy stance as premature. Austan Goolsbee, Chicago Fed President, shares a similar sentiment, cautioning that the market's optimism for rate cuts might be exceeding realistic expectations.

A resurgence in existing home sales and a significant boost in consumer confidence serve as positive indicators for the United States (US) economy, and might have lent support for the US Dollar. November's US Existing Home Sales Change showed a noteworthy monthly increase of 0.8%, marking a substantial recovery from the preceding decline of 4.1%. The CB Consumer Confidence witnessed remarkable growth., registering its most significant increase since early 2021, climbing from 101.0 to 110.07.

Investors are poised to closely watch crucial economic releases during the North American session to gain deeper insights into the state of the US economy. Among these, notable indicators include US Gross Domestic Product Annualized (Q3), Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey.