EUR/USD steady despite strong US GDP as Greenback stays under pressure

• The EUR/USD holds firm on Thursday, extending gains for a second straight session.
• The US GDP second estimate showed 3.3% annualized growth in Q2, above the 3.1% forecast.
• Traders await Friday's July PCE inflation data, which may shape the Fed's monetary policy path.

The Euro (EUR) holds firm against the US Dollar (USD) on Thursday,as the latest batch of US economic data failed to shift the broader bearish tone surrounding the Greenback. The pair briefly climbed to an intraday high of 1.1687 before easing to trade near 1.1666 at the time of writing. Despite the pullback, EUR/USD remains higher on the day, extending its advance for a second session while staying within the range that has contained price action since early August.

The Bureau of Economic Analysis reported that the second estimate of US Gross Domestic Product (GDP) confirmed a 3.3% annualized expansion in Q2, slightly above the 3.1% consensus and stronger than the 3.0% pace seen previously. The resilience in activity was accompanied by still-solid labor market data, with Initial Jobless Claims falling to 229,000, marginally below expectations of 230,000 and down from a revised 234,000.

Inflation, however, eased according to preliminary quarterly readings. The Core Personal Consumption Expenditures (PCE) Price Index rose 2.5% QoQ, undershooting the 2.6% forecast and matching the prior 2.5%. The GDP Price Index and headline PCE Prices both printed at 2.0%, slipping from 2.1% previously, signaling disinflationary progress.

The data, however, failed to provide impetus to the US Dollar, which remains under broad pressure amid concerns over Fed independence and a dovish monetary policy outlook. At the time of writing, the US Dollar Index (DXY) is trading around 98.00, down 0.20% on the day. Market attention now turns to Friday's release of the July monthly PCE inflation report, which will carry greater weight for the Fed's near-term policy outlook and could set the next directional cue for the Greenback.