USD strength questioned as Atlanta Fed GDPNow rises to 5.4% amid skepticism

The Atlanta Fed's GDPNow tracker edged higher to 5.4% annualized growth for Q4 2025, up from 5.3% previously, though market participants remain skeptical about the reliability of this forecast. The modest 0.1 percentage point increase was driven by stronger construction spending data, but analysts note that the extended US government shutdown has significantly distorted economic indicators, making accurate GDP tracking particularly challenging this quarter. The dollar showed mixed reactions to the update, with traders cautious about positioning ahead of clearer data releases. Technical levels for major USD pairs remain range-bound, with EUR/USD holding near 1.0800 and USD/JPY consolidating around 156.00. The skepticism surrounding the GDPNow model suggests traders are looking for confirmation from upcoming hard data before committing to directional bets on the greenback.