The US dollar rallied as the Dow Jones Industrial Average started the day with triple-digit losses, but a later rebound in domestic stock markets left the greenback relatively unchanged through the afternoon. Morning US economic data proved largely uneventful, as second revisions to Q2 Gross Domestic Product numbers fell in line with consensus forecasts. Yet a simultaneous jump in Initial Jobless Claims painted a dreary picture for the future of labor market growth.

The Euro lost ground against its American counterpart, shedding $.0030 to $1.3645. The British Pound similarly lost on the early stock market tumbles, dropping $.0033 to $2.0141. Meanwhile, the Japanese Yen was the biggest gainer on the day; the US dollar fell ¥0.40 to ¥115.71.

Markets showed little concern over morning US economic data, with the dollar remaining almost squarely unchanged following the release of GDP and Jobless Claims figures. The Bureau of Economic Analysis reported the US economy expanded at a 4.0 percent annualized pace through the second quarter—its strongest performance since Q1, 2006. This represents a noteworthy upward revision to earlier estimates of a 3.4 percent growth rate, but consensus forecasts showed expectations of a slightly higher 4.1 percent result. The very marginal disappointment was hardly cause for alarm, however, and the dollar remained stable through subsequent trade. Yet the attached Personal Consumption numbers sent a relatively clear warning that consumers have cut back spending through the medium term.

Personal Consumption grew at its slowest pace since the final quarter of 2005, as consumers scaled back demand in the face of slowing home price growth. The much-publicized mortgage equity withdrawal effect, in which consumers would borrow against their home equity to fund other major purchases, took a hit on a slowdown in the broader housing sector. It seems relatively unsurprising to note that consumption would decelerate through the medium term and that the trend remains lower through the future. Such an outlook leaves particular emphasis on future Retail Sales reports, as consumer spending makes up a significant portion of US Gross Domestic Product.

The Dow Jones Industrial Average remained choppy through late afternoon trade, as an earlier tumble reversed and saw the index briefly positive midway through the session. Yet such gains were to be short-lived, with the Dow 50 points off to 13,238. The S&P 500 followed suit at 0.5 percent lower to 1,456. The NASDAQ Composite remained afloat, however, remaining almost exactly unchanged at 2,562 an hour ahead of the close. Continued volatility in equity markets highlight investor skittishness and the potential for further declines.

The large swings in stock markets unsurprisingly boosted US Treasury bonds, with the 2-year note losing 8 basis points in yield to 4.09 percent. The longer-term 10-year Note lost a similar 6 basis points to yield 4.50 percent. The continued rallies in safe haven assets underline worries over recent market turmoil, with risky assets likely to continue to underperform through upcoming trade.

David Rodriguez is a Currency Analyst at FXCM.