When you bounce, make sure to bounce back stronger. The US dollar made a comeback coup last Friday as the currency finally returned to the bullish territory after the government released a lackluster economic data, which sparked doubts on the dollar’s major losses recently.
The US dollar index, which gauges the greenback against a basket of six major currencies, ended Friday on a right foot as it jumped 0.2% and was last trading at 100.58, after touching a session high of 100.82 in the early session but wrapped up the week with 0.2% loss.
The index now is down 1.6% for the whole month of January.
The surge by the US dollar last week was heavily backed up by a batch of disappointing economic figures from the Department of Commerce, showing a slight expansion on the country’s gross domestic product at an annual rate rise of 1.9%, below the estimates of 2.2% and down from the 3.5% gain in the previous quarter.
The latest GDP data was the worst reading for the country in six years as consumer spending and business investment accelerated while the nation’s export slipped, giving investors a room to question the greenback’s recent losses have gone too far.
Markets believed that the US dollar is up to strong bounce back as they expected President Donald Trump to pursue trade policies that could stoke inflation, a big advantage to dollar.
Against the Japanese yen, the greenback jumped to 115.11 from 114.46 in the previous session while the euro depreciated at 1.06 from 1.07.