The dollar index gained 0.68% to 98.50, hitting a two-week high

The dollar strengthened against major peers including the euro and yen on Thursday following U.S. economic data, which would likely restrain the future interest rate cuts by the Federal Reserve.

The Commerce Department reported that U.S. gross domestic product rose by an upwardly revised rate of 3.8% from April through June, higher than 3.3% initially reported.

The dollar firmed 0.58% to 149.77 against the yen, rising to its highest level since August 1.

The euro hit a more than two-week low against the dollar, last trading down 0.66% at $1.1659.

I think everyone seems to have a bit of dollar shorts, and at least anecdotally, it added up to more than what the market thought, said Steve Englander, head of Global G10 FX Research and North America Macro Strategy at Standard Chartered Bank NY Branch.

A year from now, our forecast for where interest rates are going to be is above the market because we think and recent data is showing that there’s this real slip between the labour market softness and GDP and output numbers, which are in general bigger, he added.

The dollar index gained 0.68% to 98.50, hitting a two-week high. The dollar has been marginally higher since the U.S. central bank cut interest rates last week.

Traders are anticipating at least two rate cuts in this year’s remaining two bank meetings, although comments from policymakers including Chair Jerome Powell indicate a lot will depend on upcoming economic data.

U.S Treasury yields rose across the board. For benchmark U.S. 10-year notes, the yield added 2.5 basis points to 4.172%. The 2-year note yield, which typically moves in step with interest rate expectations for the central bank, added 6.3 basis points to 3.661%.