Finance

Breaking: US GDP expands 1.5% in Q2 vs 2.1% expected

July 30, 2026 10:42 AM GMT · FXStreet

The United States' (US) Gross Domestic Product expanded at an annual rate of 1.5% in the second quarter, the US Bureau of Economic Analysis' (BEA) first estimate showed on Thursday. This print followed the 2.1% growth recorded in the first quarter and came in below the market expectation of 2.1%.

"Compared to the first quarter, the deceleration in real GDP in the second quarter reflected a downturn in government spending and decelerations in investment and exports that were partly offset by an acceleration in consumer spending. Imports increased more in the second quarter than in the first quarter," the BEA explained in its press release.

Other details of the report showed that the GDP Price Index jumped to 6.3% in Q2 from 3.6% in Q1. Additionally, the Personal Consumption Expenditures (PCE) Price Index declined by 0.1% on a monthly basis in June, while the annual rate eased to 3.7% from 4.1%.

Finally, the core PCE Price Index, the Federal Reserve's (Fed) preferred gauge of inflation, increased 3.3% on a yearly basis, matching the market expectation.

Market reaction to US GDP data

The US Dollar (USD) Index showed no immediate reaction to these figures and was last seen losing 0.15% on the day at 100.65.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

This section below was published as a preview of the US Gross Domestic Product (GDP) data at 08:00 GMT.

The US economy is seen expanding at an annualised rate of 2.1% in Q2.
The prints could expose the impact of the US-Iran crisis on the economy.
The US Dollar keeps its multi-day recovery well in place.

The United States (US) Bureau of Economic Analysis (BEA) is set to publish its preliminary estimate of second-quarter Gross Domestic Product (GDP) on Thursday, with analysts expecting the data to show annualised growth at a solid 2.1%, a modest cooling from the 2.1% expansion recorded in the previous quarter.

Markets brace for US growth and PCE data amid geopolitical woes

Investors are anxious ahead of Thursday's release of the US preliminary GDP figures for the April-June period, which is generally considered the most market-moving estimate of the three issued each quarter. Beyond headline growth, the domestic calendar also includes the publication of the inflation tracked by the Personal Consumption Expenditures (PCE), the Federal Reserve’s (Fed) preferred inflation gauge.

The upcoming GDP release keeps its importance intact as market participants will look for signs of any effects of the ongoing crisis in the Middle East. Regarding inflation, market participants also expect the impact of Trump’s tariffs and the increased volatility around energy prices to remain front and centre.

The release follows the Fed’s July 28-29 meeting, where the Committee delivered a widely anticipated “on hold” decision on the Fed Funds Target Range (FFTR).

Also included in the report is the GDP Price Index, commonly called the GDP deflator, which measures inflation across all domestically produced goods and services, including exports but excluding imports. These data will become more prominent amid the ongoing US-Iran conflict and its impact on Crude Oil prices.

The Atlanta Fed’s GDPNow model, closely watched for its real-time tracking of economic activity, forecast a 1.6% expansion in Q2 GDP as of its July 27 update (down from 1.7% set on July 17).

When will the GDP print be released, and how can it affect the US Dollar Index?

The US GDP report, due at 12:30 GMT on Thursday, could prove pivotal for the US Dollar (USD) in case of a big surprise in either direction as markets remain almost exclusively focused on developments from the Middle East. Alongside the headline growth figure, markets will scrutinise updates to the GDP Price Index and the PCE, crucial data points that could shift expectations for the Fed rate path and the Greenback’s direction.

A stronger-than-expected GDP, or even an in-line reading, should keep the US “exceptionalism” narrative well in place, offering a tailwind for the current recovery of the buck. Inflation data, on the other hand, is expected to match the trend already seen with the release of CPI figures earlier this month.

The broader technical outlook for the US Dollar Index (DXY) remains slightly constructive amid the ongoing consolidative price action. The index is trading in the upper end of its multi-month range well north of the 101.00 barrier. It is worth noting that the positive outlook is expected to remain unchanged while above its 200-day SMA near 99.10. Further gains from here should meet the next hurdle at the YTD ceiling at 101.80 (June 24).

Downside levels emerge at the July floor at 100.35 (July 14), seconded by the provisional 55-day and 100-day SMAs at 100.24 and 99.68, respectively. South from here comes the more relevant 200-day SMA at 99.12, which precedes the weekly trough at 98.75 (May 29).

Momentum indicators lean bullish, with the Relative Strength Index (RSI) near the 63 level and the Average Directional Index (ADX) just above 25, suggesting growing strength behind the recent upward move.

Economic Indicator

Core Personal Consumption Expenditures - Price Index (YoY)

The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal Reserve’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures." Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Economic Indicator

Gross Domestic Product Annualized

The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.