The U.S. dollar is regaining ground, with the greenback-related exchange traded fund trading back above its long-term trend line, on the recent upbeat economic data.
The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP), which tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, gained 0.8% on Friday. UUP is trading above its 200-day simple moving average and was testing its 50-day line. The dollar ETF is still down 1.5% year-to-date.
The Dollar Index, which covers a basket of developed market currencies, was 0.9% higher on Friday to 98.143.
The USD rose to a three-week high against the euro currency and a one-week high against the Japanese yen while the British pound dipped to its lowest level against the greenback since 2009, reports Min Zeng for the Wall Street Journal.
The U.S. dollar was regaining ground after the government revealed the economy expanded at a better-than-expected 1% rate during last quarter of 2015, compared to previous predictions of 0.7% and economists’ projections of a 0.4% expansion. Additionally, another report revealed increased consumer spending and upbeat business spending numbers.
The stronger U.S. data helped support calls for the Federal Reserve to stick to interest rate normalization, which would diminish the amount of dollars sloshing around and strengthen the U.S. currency.